Methyl sarcotroates A and B (3 and 4), two unprecedented diterpenoids possessing a tetradecahydrocyclopenta[3',4']cyclobuta[1',2':4,5]cyclonona[1,2-b]oxirene ring system, along with their probable biogenetic precursor, sarcophytonolide M (1), were isolated from the Hainan soft coral Sarcophyton trocheliophorum. Their structures were elucidated by detailed spectroscopic analysis, and the absolute configuration of compound 3 was determined by TDDFT ECD calculations. Compound 4 exhibited significant inhibitory activity against protein tyrosine phosphatase 1B (PTP1B), being similar to that of positive control oleanolic acid.