A new species of goby, Bathygobius mero, is described from eastern Bali, Indonesia on the basis of 8 adult specimens, 26.3–36.0 mm SL. There are also photographic records from Sumba, Indonesia, Cebu, Philippines, and Queensland, Australia. Diagnostic features include 19–21 (usually 20) pectoral-fin rays with the upper three rays free from the membranous portion of the fin and each with two filamentous tips, a mostly scaleless predorsal midline except for two or three scales in front of first dorsal-fin origin, and 33 or 34 lateral scales. The live coloration is overall pale greyish with a dense covering of reddish-brown freckles, a brown spot (about one third of pupil size) at the uppermost part of the gill opening, and reddish-brown spotting on the fins. The new species has a commensal association with the large barrel sponge (Xestospongia testudinaria), unlike other members of the genus, which are typically free-living bottom dwellers. It also inhabits deeper water (9–30 m, but usually below about 15 m) than most Bathygobius, which are mainly confined to shallow water less than 10 m deep.