During a survey of the marine Crustacea of the Cayman Islands, Heteromysis ebanksae, new species was discovered in depths of 1–3 m adjacent to Little Cayman Island and from North Sound, Grand Cayman Island. The new species, which belongs to the subgenus Olivemysis Băcescu, 1968, collected from live bottom and sea grass habitats, is distinguished from other closely related species in the western Atlantic by differences in the setation of thoracic endopod 3, male pleopod 4 and the telson. Heteromysis ebanksae has 2–9 flagellated spiniform setae on male pleopod 4, 6–10 spinules along the anterior half of the telsonic cleft, and each apical lobe of the telson has a pair of spiniform setae, the outer 1.2 times longer than the inner. A diagnostic table separating the new species from H. actinae Clarke, 1955, H. bermudensis G. O. Sars, 1885 and H. floridensis Brattegard, 1969 is presented.