A new hepatitis C virus (HCV) protease inhibitor designated as Sch 351633 (1) was isolated from the fungus, Penicillium griseofulvum. Structure elucidation of 1 was accomplished by analysis of spectroscopic data, which determined compound 1 to be a bicyclic hemiketal lactone. Compound 1 exhibited inhibitory activity in the HCV protease assay with an IC50 value of 3.8 microg/mL.