Malacothamnus enigmaticus K.Morse & T.Chester (Malvaceae) is a new species endemic to the desert edge of the Peninsular Range in San Diego County, California, USA, from the San Ysidro Mountains in the north to the Laguna Mountains in the south. It is the only Malacothamnus species in its geographic range, which contains a unique habitat in San Diego County. Malacothamnus enigmaticus is morphologically distinct in many inflorescence characteristics from its two most similar species, M. densiflorus (S.Watson) Greene and M. fasciculatus (Nutt. ex. Torr. & A.Gray) Greene, which are also geographically closest to the new species. A Principal Components Analysis (PCA) of morphological features shows that M. enigmaticus is clearly distinct from both M. densiflorus and M. fasciculatus, and that all three species show the same level of separation from each other. Hence M. enigmaticus should be equally recognized at species rank. Malacothamnus enigmaticus and M. fasciculatus are both distinguished from M. densiflorus by their much-higher density of stellate stem hairs, and in most specimens by their shorter stellate hair rays and more numerous stellate hairs on the calyx. Malacothamnus enigmaticus is distinguished from M. fasciculatus by its longer calyx bracts, and generally by its wider stipular bracts. Malacothamnus enigmaticus is a rare species, known from just two ∼150 km² areas separated by a gap of ∼15 km, one in the Laguna Mountains and one in the Pinyon Ridge / Culp Valley / San Ysidro Mountain area. Due to its limited range and small populations, we propose a California Rare Plant Rank of 1B.3 for the species.