Thalassodendron ciliatum (Forssk.) Den Hartog is a seagrass belonging to the plant family Cymodoceaceae with ubiquitous phytoconstituents and important pharmacological potential, including antioxidant, antiviral, and cytotoxic activities. In this work, a new ergosterol derivative named thalassosterol (1) was isolated from the methanolic extract of T. ciliatum growing in the Red Sea, along with two known first-reported sterols, namely ergosterol (2) and stigmasterol (3), using different chromatographic techniques. The structure of the new compound was established based on 1D and 2D NMR spectroscopy and high-resolution mass spectrometry (HR-MS) and by comparison with the literature data. The new ergosterol derivative showed significant in vitro antiproliferative potential against the human cervical cancer cell line (HeLa) and human breast cancer (MCF-7) cell lines, with IC50 values of 8.12 and 14.24 µM, respectively. In addition, docking studies on the new sterol 1 explained the possible binding interactions with an aromatase enzyme; this inhibition is beneficial in both cervical and breast cancer therapy. A metabolic analysis of the crude extract of T. ciliatum using liquid chromatography combined with high-resolution electrospray ionization mass spectrometry (LC-ESI-HR-MS) revealed the presence of an array of phenolic compounds, sterols and ceramides, as well as di- and triglycerides.