Chylocladia schneideri sp. nov., a diminutive species of Chylocladia (Rhodymeniaceae, Rhodophyta), is described from a shallow-water mangrove channel habitat in Puerto Rico, Caribbean Sea. The new species was collected as an epiphyte of Avrainvillea longicaulis (Kütz.) G. Murray & Boodle, Halimeda incrassata (J. Ellis) J.V. Lamour and Thalassia testudinum Banks ex Koenig. The primarily prostrate-growing alga has branches that measure to 2.0 cm in length with a maximum diameter of only 0.6 mm. Tetrasporangia are cut off internally and measure 40 – 55 μm in diameter. Cystocarps are nearly spherical, measure to 450 μm in diameter, and lack an ostiole. Chylocladia schneideri is among the smallest species of the genus, and, prior to this account, no Chylocladia species were recognized in the western Atlantic.