A new species of woolly horseshoe bat in the Rhinolophus trifoliatus species group is described from Sabah in Malaysian Borneo. Two specimens from Central and West Kalimantan, Indonesia are referred to this species. A fourth specimen from western Thailand is referable to this species but on the basis of ~10% genetic divergence at the cytochrome oxidase-I gene is described as a separate subspecies. Morphologically and acoustically the two subspecies are similar. With a forearm length of 52.90–54.70 mm, a skull length of 24.27–26.57 mm and a call frequency of 49.2–50.0 kHz, the new species overlaps in size and call frequency with the sympatric R. trifoliatus. However, it differs significantly in having a dark noseleaf and a uniformly dark brown pelage, resembling, but being intermediate in size between R. sedulus and R. luctus, which have a skull length of 18.99–20.17 and 26.35–32.07 mm, respectively. It also differs from R. trifoliatus in the shape and size of the rostral inflation. It can be distinguished from R. beddomei (forearm length 55.00–63.44 mm) and R. formosae (forearm length 53.85–62.40 mm), which are endemic to the Indian Subcontinent and Taiwan, respectively, by its relatively smaller body size. Acoustic and genetic data are included in the comparison between the species. Both character states support the conclusions based on morphology. Further surveys in intact evergreen forest together with a re-examination of museum specimens may reveal that this species is widespread in Southeast Asia.