Chemical investigations of a fermentation culture from the endophytic fungus Pestalotiopsis sp. yielded three novel caprolactams, pestalactams A-C (1-3). The structures of 1-3 were determined by analysis of 1D and 2D-NMR, UV, IR, and MS data. The structure of pestalactam A was confirmed following single crystal X-ray diffraction analysis. Pestalactams A-C are the first C-7 alkylated caprolactam natural products to be reported. Pestalactams A (1) and B (2) were tested against two different strains of the malaria parasite Plasmodium falciparum (3D7 and Dd2), and the mammalian cell lines, MCF-7 and NFF, and showed modest in vitro activity in all assays.