Studies in the neutral fraction of stem bark of Azadirachta indica(neem) have resulted in the isolation and structure elucidation of three new diterpenoids, margolone (1a), margolonone (2a), and isomargolonone (3a). The structure of these compounds has been established as 12-methyl-7-oxopodocarpa-8,11,13-triene-13-carboxylic acid, 12-methyl-3,7-dioxopodocarpa-8,11,13-triene-13-carboxylic acid, and 13-methyl-3,7-dioxopodocarpa-8,11,13-triene-12-carboxylic acid respectively, through chemical transformations and spectral studies. These diterpenoids showed antibacterial activity against various gram-positive and gram-negative organisms and represent the first isolation of podocarpane derivatives with carbon substituents at both C-12 and C-13.