A new species of gall midge, Gagnemyia alstoniae Adair and Kolesik, is described from flower bud galls on milkwood tree Alstonia actinophylla (A. Cunn.) K. Schum. in far northern Australia. Galled flower buds fail to open and set seed. Larva, pupa, male, and female of the new species are described and illustrated. A new genus, Gagnemyia Adair and Kolesik, is proposed to contain the new species. Gagnemyia is tentatively placed in the tribe Clinodiplosini and is characterised by a robust aedeagus bearing asetose sensilla, an undivided male hypoproct that is wrapped around the aedeagus, a needle-like ovipositor, toothed tarsal claws and larval terminus bearing two pairs of corniform and two pairs of setiform papillae. This is the first record for Cecidomyiidae feeding on Apocynaceae in Australia.