Ctenophorus is the largest genus of Australian agamid lizards, with an extensive radiation in the arid zone. Here we describe a distinctive new dragon species—Ctenophorus nguyarna—from the isolated Lake Disappointment in Western Australia. The new species is characterised by heterogeneous dorsal scales tending to form vertical rows on the flanks, a reticulated orange and black background color, and black bars on the dorsum and black vertical bars on the tail. To provide a molecular context as to the distinctiveness and placement of the new species we analysed five sequences of Ctenophorus sp. nov., two new sequences of C. salinarum and 11 previously published sequences of Ctenophorus species, representing ~1573 bases of the mitochondrial genome. Our phylogeny strongly supports at least two independent origins of salt lake specialization in both the western and eastern arid zone. Based on molecular data the sister taxon is C. salinarum, which is also associated with salt lakes in Western Australia. The other specialist is the Lake Eyre Dragon (C. maculosus) from South Australia that lives on and under the salt crust itself, and has a number of unique derived characters for Ctenophorus. There are likely to be other new species of agamid lizards in Australia's vast and little-explored arid zone.