A new Metapeyssonnelia species that comprises up to 7% bottom cover at shallow-water reef habitats in southwest Puerto Rico is described herein. It forms conspicuous orange encrustations on hard substrata and does not grow on living coral as does its two Caribbean congeners. The new species possesses conspicuous, to 30 cm in extent, tightly adherent crusts up to 950 μm thick, only hypobasal calcification, hypothallial cells arranged in broad flabellules and superficial (raised) tetrasporangial and carposporangial nemathecia. Tetrasporangia are pedicellate, borne laterally from cup-like cells that are derived from basal paraphysal cells. Tetrasporangia measure up to 120 μm long and individual carposporangia to 80 μm long. The new species differs from other Metapeyssonnelia species developmentally in that perithallial cells at mid thallus height will divide laterally to form a new hypothallium. Small subunit gene sequences relate the new species to the two Metapeyssonnelia species that are previously known from Puerto Rico.