A new species of the cichlid genus Pseudotropheus Regan (Teleostei: Cichlidae), from Lake Malawi is described. The new species is a member of the Pseudotropheus williamsi complex from Mbenji Island. Pseudotropheus williamsi is the type species of the genus Pseudotropheus, which is a polyphyletic grouping of several species of rock-dwelling cichlids from Lake Malawi. In addition to the P. williamsi complex, Pseudotropheus contains species belonging to the P. tropheops, P. elongatus, and Pseudotropheus aggressive complexes, as well as a group of miscellaneous forms such as Pseudotropheus fainzilberi. We predict that Pseudotropheus eventually will be restricted taxonomically to include only members of the P. williamsi complex, but because of the lack of phylogenetic data on many of the miscellaneous forms (e.g., P. fainzilberi) we are currently unable to diagnose Pseudotropheus as monophyletic.