A novel biphenyl derivative, insularione (3,3′,4,4′,6-pentahydroxy-3,4-dihydro-[1,1′-biphenyl]-2,5-dione) (1), was isolated from the stems of Cinnamomum insulari-montanum Hayata (Lauraceae) along with six known compounds. The structure of the novel biphenyl derivative was characterized on the basis of spectral analysis.