Algae, bacteria, and fungi, as well as higher plants, produce a wide variety of secondary metabolites known as natural products. Natural products are well known as remarkable sources of many therapeutic agents. The genus Nemania is a wood-decaying fungus that belongs to family Xylariaceae. Nemania is often found as an endophyte in diverse hosts and some species are known to produce useful secondary metabolites. In this study, two Nemania species were isolated as an endophytic fungus from Aquilaria sinensis. Multi-gene phylogenetic studies showed that the newly described strains of Nemania are new to science, and this is the first report of Nemania from the host Aquilaria. One of the fermented species, Nemania aquilariae (KUMCC 20-0268), resulted in five sesquiterpenoids, which were previously reported from agarwood, and their structures were identified by gas chromatography-mass spectrometry (GC-MS). In addition, five different media were investigated in vitro to optimize conditions for growing the fungal biomass of Nemania aquilariae and N. yunnanensis.