A new prenylated dihydrobenzofuran derivative (1), was isolated from the rhizomes of Atractylodes lancea DC (Asteraceae), along with ten known compounds, including atractylenolide II (2), phi-taraxasteryl acetate (3), taraxerol acetate (4), beta-sitosterol (5), stigmasterol (6), beta-eudesmol (7), atractylenolide III (8), atractylenolide IV (9), daucosterol (10), and stigmasterol 3-O-beta-D-glucopyranoside (11). The structure of the new compound (1) was elucidated as trans-2-hydroxyisoxypropyl-3-hydroxy-7-isopentene-2,3-dihydrobenzofuran-5-carboxylic acid by the combination of 1D, 2D NMR analysis and mass spectrometry, and it was the first reported 2,3-dihydrobenzofuran derivative having a carboxyl residue at C-5 and an isopentene moiety at C-7 contemporaneously. In addition, compound 1 exhibited significant cytotoxicity against cancer cell lines HCT-116 and MKN-45.