Let A be a *-algebra. An additive mapping E : A → A is called a Jordan *-derivation if E(X2) = E(x)x*+xE(x) holds, for all x 6 A. These mappings have been extensively studied in the last 6 years by Bresar, Semrl, Vukman and Zalar because they are closely connected with the problem of representability of quadratic functionals by sesquilinear forms. This study was, however, always in the setting of associative rings. In the present paper we study Jordan *-derivations on the Cayley-Dickson algebra of octonions, which is not associative. Our first main result is that every Jordan *-derivation on the octonion algebra is of the form E(x)=ax*-xa. In the terminology of earlier papers this means that every Jordan *-derivation on the octonion algebra is inner. This generalizes the known fact that Jordan *-derivations on complex and quaternion algebras are inner. Our second main result is a representation theorem for quadratic functionals on octonion modules. Its proof uses the result mentioned above on Jordan *-derivations.