A new dwarf lizard of the genus Agama Daudin, 1802 (Sauria: Agamidae), is described from central Ethiopia. This dwarf agama (< 59 mm snout–vent length [SVL]) was compared with other dwarf congeners (< 65 mm SVL) in West, Central, and East Africa and to medium-sized agamas (< 92 mm SVL) occurring in the Horn of Africa. The new species is characterized by a homogeneous body scalation; keeled but nonmucronate dorsal scales; smooth ventral, gular, and upper head scales; and having the nasal scale on the canthus rostralis. It is morphologically well differentiated from all congeners to which it was compared in having a nuchal crest, few tufts of short spinose scales, and the nasal scale on the canthus rostralis and can further be identified by its large occipital scale, smooth gular and ventral scales, and keeled, but not strongly mucronate or spinose, dorsal scales. The new species may live in colonies, like many of the larger rock Agama species, and based on the presence of multiple age classes at the same time of year, it is probably not an annual species, as are some other dwarf Agama. The affinities of the new species are unclear but, on zoogeographic grounds, may lie with congeners to the west of the Rift Valley.