A study of specimens from the mammal collections of the American Museum of Natural History that were originally assigned to Phalanger orientalis sensu lato revealed the presence of three taxa: P. orientalis from northern New Guinea, the Bismarck Archipelago, and the Solomon Islands; P. intercastellanus from southeast New Guinea, the D'Entrecasteaux Islands, the Trobriand Islands, and the Louisade Archipelago; and a group from southern New Guinea and the Cape York Peninsula of Australia that could not be assigned to either of the two foregoing species. Possession of a distinctive suite of morphological characters warrants recognition of this group at the species level. The characteristics and habitat of the species are described, and the zoogeographic implications of its distribution are discussed.