Argutalactone (1), a novel sesquiterpenoid lactone featuring an unprecedented 6/5/7 rigid skeleton, was isolated from the roots of Incarvillea arguta. The structure and relative configuration of 1 were established by extensive analysis of spectroscopic data. The absolute configuration of 1 was determined as 2R,5S,10R,12S based on the analysis of biogenetical transformation, comparison of the optical rotation with literature data, and comparison of the experimental circular dichroism spectrum with the calculated electronic circular dichroism spectra.