Abstract: The alga known as Hymenena palmata f. marginata (Harvey) Kylin has been thought to be confined to the northern part of the South Island and the southern part of the North Island of New Zealand and is represented by a variety of thallus forms. The pattern of its apical growth is similar to that of Hymenena palmata (Harvey) Kylin, a poorly known species that is said to be widespread throughout New Zealand. As a consequence, H. palmata f. marginata has been misplaced under Hymenena for a long time. Unlike many species of Hymenena, the thallus branches entirely from the margins and lacks both macroscopic nerves and microscopic veins. Phylogenetic analysis of rbcL sequence data shows that, while H. palmata f. marginata is a member of the subfamily Phycodryoideae, it belongs in the Phycodryeae rather than the Cryptopleureae, a tribe that includes Hymenena, where it might otherwise be placed based on its gross morphology and growth by means of a marginal meristem with many obliquely dividing marginal cells. Procarp and cystocarp development are similar to that of the Phycodryeae, and the carposporangia are formed in chains rather than terminally as in Hymenena. The cystocarp of H. palmata f. marginata is unusual in that cells derived from the cystocarp floor form secondary pit connections with a large central fusion cell. We propose the name Hymenenopsis heterophylla S.-M. Lin, W.A. Nelson & Hommersand gen. et sp. nov. for this New Zealand red alga.