Colonies of the soft coral Lobophytum pauciflorum (Ehrenberg, 1834) (Coelenterata: Octocorallia: Alcyonacea: Alcyoniidae), some of which were heavily overgrown by the algae Ceranium flaccidum (Kuetzing) Ardissone and Enteromorpha sp., and other minor epizoites, were collected at Taylor Reef (17°50′S; 146°35′E) in the Great Barrier Reef. Overgrown colonies contained the diterpene 2-epi-sarcophytoxide as the major secondary metabolite, while conspecific colonies with clean polyparies contained two diterpenes in approximately equal amounts: 14-hydroxycembra-1,3,7,11-tetraene and 15-hydroxycembra-1,3,7,11-tetraene. By contrast, twenty conspecific pairs of overgrown and clean colonies of other alcyoniid soft corals collected from Pelorus Channel, Palm Island Group (18°34′S; 146°29′E), showed no chemical differences within in the pairs. Cultures of a common species of Ceramium [C. codii (Richards) Mazoyer] were incubated with different concentrations of nine soft-coral-derived diterpenes and significant algal growth inhibition was observed in many cases. It appears that terpenoids from soft coral may contribute to the lack of epizoic organisms on soft-coral polyparies.