One novel hybrid peptide-polyketide, dahurelmusin A (1), was isolated from Elymus dahuricus infected by the Epichloë bromicola endophyte. Comprehensive spectroscopic analysis revealed that 1 is the first example of hybrid peptide-polyketide possessing an unprecedented 5-hydroxy-2,2,4,6-tetramethyl-3-oxooctanoic acid moiety. The single-crystal X-ray diffraction analyses allowed the absolute configuration assignment of this compound. Compound 1 also exhibited significant insecticidal activities against Rhopalosiphum padi and Brevicoryne brassicae with LC50 values of 0.092 and 0.251 mM, respectively.