Omphalotins E–I, oxidatively modified cyclic dodecapeptides, were isolated from mycelial extracts of the basidiomycete Omphalotus olearius, and their structures were determined by NMR spectroscopic and MS methods. Four of the five omphalotins contained an unprecedented N‐hydroxylated tricyclic tryptophan derivative. All compounds exhibited strong and selective nematicidal activity against the plant pathogen Meloidogyne incognita with LD90 values between 2 and 5 μg mL–1. Cytotoxic activities were not detected up to 50 μg mL–1. (© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2009)