Three new polyketides 4,6,8-trihydroxy-5-methyl-3,4-dihydronaphthalen-1(2H)-one (1), 5,7-dihydroxy-3-(1-hydroxyethyl)-3,4-dimethylisobenzofuran-1(3H)-one (2) and 1-(4-hydroxy-6-methoxy-1,7-dimethyl-3-oxo-1,3-dihydroisobenzofuran-1-yl) ethyl acetate (3) together with seven known analogues (4-10) were isolated from desert endophytic fungus Paraphoma sp. The structures of these compounds were elucidated by analysis of NMR data. The absolute configuration of (1-3) was established on the basis of CD experiments. The possible biosynthetic pathway of compounds (1-10) was suggested, which implied that these secondary metabolites might be originated from polyketide biosynthesis with different post-modification reactions. Compounds 2, and 5-8 were evaluated for bioactivities against plant pathogen A. solani, whereas none of them displayed any biological effects. In addition, compounds 1, 2 and 5-10 were also tested for cytotoxic activities against three human cancer cell lines (HepG2 cells, MCF-7 cells and Hela cells) without biological effects.