A new species of mesophotic marine red algae, Ethelia hawaiiensis sp. nov., is illustrated and described. Ethelia hawaiiensis is distinguished from other members of the genus by its large diameter assurgent filament cells, and in having thallus cavities that are frequently inhabited by microalgae, as well as in DNA sequence. Analyses of mitochondrial COI, plastid rbcL, and nuclear SSU sequences demonstrated that E. hawaiiensis was distinct from other species of Ethelia and that it was not phylogenetically closely related to other known species. Both COI and rbcL analyses placed E. hawaiiensis within a clade of other Ethelia sequences, while the SSU analyses, which only included two previously described species of Ethelia, resolved E. hawaiiensis as sister to a clade comprising Ethelia plus the Peyssonneliales. Morphological differences between E. hawaiiensis and other members of the genus are discussed.