A new species of dwarfgoby, Eviota kathyae, is described from the volcanic fjords of Tufi, Papua New Guinea. The new species is diagnosed by the combination of unbranched pectoral-fin rays, the cephalic sensory-canal pore system lacking only the IT pore, a dorsal/anal fin-formula of 8/7, no fifth pelvic-fin ray, a vertically constricted black blotch at the caudal-fin base, a mostly unmarked caudal fin, and the iris above the pupil crossed by an unbroken red band. The species is likely endemic to this unique habitat formed by collapsed lava flows.