Three new polyketides 4,6,8-trihydroxy-5-methyl-3,4-dihydronaphthalen-1(2H)-one (1), 5,7-dihydroxy-3-(1-hydroxyethyl)-3,4-dimethylisobenzofuran-1(3H)-one (2) and 1-(4-hydroxy-6-methoxy-1,7-dimethyl-3-oxo-1,3-dihydroisobenzofuran-1-yl) ethyl acetate (3) together with seven known analogues (4–10) were isolated from desert endophytic fungus Paraphoma sp. The structures of these compounds were elucidated by analysis of NMR data. The absolute configuration of (1–3) was established on the basis of CD experiments. The possible biosynthetic pathway of compounds (1–10) was suggested, which implied that these secondary metabolites might be originated from polyketide biosynthesis with different post-modification reactions. Compounds 2, and 5–8 were evaluated for bioactivities against plant pathogen A. solani, whereas none of them displayed any biological effects. In addition, compounds 1, 2 and 5–10 were also tested for cytotoxic activities against three human cancer cell lines (HepG2 cells, MCF-7 cells and Hela cells) without biological effects.