A new species of alpheid-shrimp-associated gobiid fish, Mahidolia paucipora, is described from Milne Bay Province, eastern Papua New Guinea, on the basis of 5 female specimens from 17.7–23.2 mm SL collected from a silty-sand and rubble bottom at 14.5–27 m depth. Diagnostic features that distinguish the new species from the widespread nominal Mahidolia mystacina include a reduced pattern of cephalic sensory-canal pores, with only pores B’, D, E, F, and H present; a very small size at maturity (<20 mm SL); and a color pattern consisting of a whitish body with 5 widely spaced brown bars and the first dorsal fin with a prominent posterior white-edged black spot.