A new species of dwarfgoby, Eviota flaviarma, n. sp., is described from Milne Bay, Papua New Guinea and also occurs in the Solomon Islands. The new species is characterized by a complete cephalic sensory-canal pattern (pattern 1), a dorsal/anal fin-ray formula of 8/8, 3–5 branched pectoral-fin rays, no fifth pelvic-fin ray, the first dorsal fin not filamentous, a pear-shaped male urogenital papillae, no dark occipital or nape markings, two dark postanal spots above the anal-fin base, a yellow spot on the upper pectoral-fin base with the entire base peppered with melanophores, a dark internal spot on the caudal peduncle over the preural centrum centered on and above the vertebral column, a black first dorsal fin divided by a thin pale band, and a dark or black anal fin. The new species is closely allied to E. winterbottomi and E. algida.