The new labrid species, Cirrhilabrus isosceles, is described from six specimens, 31.0–56.7 mm SL, collected from the Ryukyu Archipelago of Japan and the northern reaches of the Philippines in the western Pacific Ocean. The holotype and a paratype were collected at 35 m depth from Funauki Bay, Iriomote-jima, Ryukyu Islands, while the four other paratypes were collected at 24–36 m from Fuga Island, Cagayan Province, northern Philippines. The new species is distinguished by features of the terminal-phase male: i.e. color pattern, a prominent long mid-dorsal-fin basal dark spot, and a broadly lanceolate caudal fin. Despite its atypical caudal-fin shape, the new species has similar color patterns to the Cirrhilabrus lunatus species complex, which differ in having a somewhat lunate caudal fin. Indeed, the mtDNA barcode COI sequences for the new species matches those of some other members of the C. lunatus complex, specifically C. cf. lunatus, C. brunneus, and C. squirei (shared mtDNA haplotypes among species has been documented in other Cirrhilabrus species complexes). Cirrhilabrus isosceles is sympatric with three other members of the C. lunatus complex, and apparently hybridizes with at least one of them. The new species is most often confused with Cirrhilabrus lanceolatus, based on the shared caudal-fin shape, however, the two species are not closely related: C. lanceolatus is in a different set of mtDNA lineages most closely related to C. jordani from Hawai’i, indicating that caudal-fin shape in this genus is not phylogenetically informative. A neighbor-joining tree and genetic distance matrix based on the COI marker is presented for a number of Cirrhilabrus species.