A new labrid fish, Halichoeres socialis is described from specimens collected in mangrove islets off Belize at depths from less than 1 m to 7 m over coral, sand, rubble, or seagrass substrata. This species feeds in small aggregations on zooplankton and forms evasive schools when threatened. Its small size (largest, 36.4 mm SL, with mature females as small as 27.4 mm) at maturity and at maximum length is unique for the genus. Halichoeres socialis is similar to juveniles of Halichoeres pictus, but it differs in having a black ocellus on its caudal fin base, which is absent in juvenile and female H. pictus.