Investigation of the freeze-dried dichloromethane: isopropanol extract of the sponge Axinella carteri Dendy, 1889 (Demospongiae: Halichondrida: Axinellidae), collected from Derawan Island, Indonesia, has led to the isolation of a new A-nor sterol with rare D-ring unsaturation, 3beta-(hydroxymethyl)-A-nor-5alpha-cholest-14-en-16-one (1). While the efficacy of the new compound is unknown, moderate cytotoxicity was observed in the fraction from which it was purified. A more polar portion of the extract afforded the known alkaloid dibromoisophakellin (2), previously isolated from an Axinella sp. The purification of the compounds was achieved on silica gel and Sephadex LH-20 supports and the identity of the compounds was established with the aid of 1D and 2D NMR spectroscopic experiments.