Australian species of the cirrhilabrin labrid genus Paracheilinus are reviewed. Four species of Paracheilinus are reported from Australian waters: P. amanda, new species, from Flora, Holmes, and Osprey Reefs, Coral Sea, off northeast Queensland, and Harrier Reef, Great Barrier Reef; P. filamentosus from Lizard Island, Great Barrier Reef; P. flavianalis from Evans and Flinders Shoals, Timor Sea, off northeast Darwin, Northern Territory, and Ashmore, Scott, Seringapatam, and Hibernia Reefs in the north-western shelf of Western Australia; and P. nursalim from Flinders Shoal, Timor Sea, off northern Darwin, Northern Territory. Paracheilinus amanda, new species, has previously been confused for P. rubricaudalis from Melanesia, but molecular analysis of mitochondrial COI recovers both species as reciprocally monophyletic lineages, differing from each other by 1–1.2% in genetic distance. They further differ in aspects of live coloration of terminal phase (TP) males. Both species are allopatric and do not overlap in distribution. The new species is described on the basis of six specimens: the holotype and two paratypes from Harrier Reef, Great
Barrier Reef, one paratype from Flora Reef, Coral Sea, and from two paratypes collected off Hula in southern Papua New Guinea, along the north-western margin of the Coral Sea. The discovery of P. nursalim in Australia represents a new and significant range extension from previous locality records of West Papua and Ambon Bay. Paracheilinus is rediagnosed, and keys, diagnoses, photographs, and Australian distribution records are presented for all species herein.