Abstract Liopropoma terecaudum sp. nov. is described based on 12 specimens collected off northern Taiwan. The new species most closely resembles two sympatric species, L. japonicum and L. dorsoluteum , but differs from both species and all other congeneric species of Liopropoma based on the following combination of morphological and colouration characters: caudal fin round; dorsal‐fin elements VIII, 13 and lacking a distinct notch; lateral side of body with a broad red stripe; base of caudal fin with a large red blotch. Phylogenetic analysis of mitochondrial DNA barcode sequences places L. terecaudum in a clade with L. dorsolutum and L. japonicum . The average genetic divergences between L. terecaudum and L. dorsoluteum , and between L. terecaudum and L. japonicum , are measured to be 11.8% and 11.9%, respectively. The description of L. terecaudum brings the total number of Liopropoma in Taiwanese waters to 11.