Bisabolane-type sesquiterpenes are a class of biologically active compounds that has antitumour, antifungal, antibacterial, antioxidant and antivenom properties. We investigated the effect of two new highly oxygenated bisabolane-type sesquiterpenes (HOBS) isolated from Cremanthodium discoideum (C. discoideum) on tumour cells. Our results showed that HOBS induced morphological differentiation and reduced microvilli formation on the cell surface in SMMC-7721 cells. Flow cytometry analysis demonstrated that HOBS could induce cell-cycle arrest in the G1 phase. Moreover, HOBS was able to increase tyrosine-α-ketoglutarate transaminase activity, decrease α foetoprotein level and γ-glutamyl transferase activity. In addition, we found that HOBS inhibited the anchorageindependent growth of SMMC-7721 cells in a dose-dependent manner. Taken together, all the above observations indicate that HOBS might be able to normalize malignant SMMC-7721 cells by inhibiting cell proliferation and inducing redifferentiation.