A new species of small tree, Cochlospermum arafuricum Cowie & Kerrigan sp. nov. from the wet-dry tropics of Australia is described and illustrated here. The species is distinctive in having the leaves divided for ⅓–½ of their length with broadly triangular, aristate leaf lobes, conspicuously serrate margins, red outer staminal filaments and with most parts almost glabrous. It appears to be relatively common although not abundant and occurs in various woodland communities in foot slope situations over a wide area of central and eastern Arnhem Land. As there are no obvious threats or decline and the species is relatively widespread and common, it is assessed as Least Concern using IUCN criteria. A key to species of Cochlospermum in the Northern Territory is provided.