Two new sesquiterpenes, (E)-(2S,3S,6R)-atlantone-2,3-diol (1) and (E)-(2S,3S,6S)-atlantone-2,3,6-triol (2), along with two known sesquiterpenes, atlantolone (3) and (E)-α-atlantone (4), were isolated from Cedrus deodara Loud. The structures of the new compounds were elucidated on the basis of UV, IR, NMR, HR‑ESI-QTOF‑MS, and EI mass spectral studies. The n-hexane and chloroformextracts of sawdust and compounds 3 and 4 from the plant exhibited antifungal activity against Aspergillus flavus, A. niger, A. ochracoeus, A. parasiticus, and A. sydowii. A weak activity was also recorded against A. parasiticus and A. sydowii for compound 1, while Trichophyton rubrum was inhibited by compound 2 and the extracts.