A new photosymbiotic didemnid, Lissoclinum midui sp. nov., is described from coral reefs in the Ryukyu Archipelago, Japan. Colonies of the didemnid are green due to Prochloron algal symbionts, which are distributed solely in the tunic. The new species is placed in Lissoclinum because of its uncoiled vas deferens and the presence of globular spicules. However, two unique characters distinguish this species from all other didemnid ascidians: the absence of a common cloacal system, and the presence of an unknown organ in the bottom wall of the branchial sac. In the phylogenetic trees inferred from partial sequences of cytochrome c oxidase subunit I (COI) gene, the new species diverged at the basal point of the clade of four photosymbiotic Lissoclinum species analyzed here.