Solanioic acid (1), a degraded and rearranged steroid that exhibits in vitro antibacterial activity against methicillin-resistant Staphylococcus aureus (MRSA), has been isolated from laboratory cultures of the fungus Rhizoctonia solani obtained from tubers of the plant Cyperus rotundus collected in Sri Lanka. The structure of solanioic acid (1) was elucidated by detailed analysis of NMR data, a single crystal X-ray diffraction analysis of a reduction product 2, and Mosher ester analysis on a derivative of the natural product. Solanioic acid (1) has an unprecedented carbon skeleton.