A new species of pygmy seahorse, Hippocampus denise, is described from Indonesia. It is distinguished from other seahorse species by its diminutive size, the possesion of a low number of tail rings (28-29), 10-11 pectoral-fin rays, 14 dorsal-fin rays, a rounded nuchal plate without a raised coronet, a snout length 30% in head length, a snout without a bulbous tip, the inferior and ventral trunk ridges reduced to disconnected star-shaped ossifications, the limited number of tubercles on the body, the plain orange body color, and males with eggs and embryos contained within the trunk region. Further specimens from Vanuatu and Palau, in addition to photographs and other observations by the senior author, suggest that this species may be relatively widespread in the West Pacific Ocean. It is recorded from depths of 13-90 m in association with gorgonian seafans identified as Annella reticulata (Ellis and Solander, 1786), Muricella sp. Verrill, 1869, and Echinogorgia sp. Kölliker, 1865. Comparisons are made with H. bargibanti Whitley, 1970, and H. minotaur Gomon, 1997.