A new species of leptostracan, Nebalia schizophthalma, is described from a single female specimen from one of the deep-sea stations along the Gay Head-Bermuda Transect. The new species differs from all other known species of the Leptostraca in that the distal margin of the eye is strongly invaginated. Other unusual features include a short, upturned ocular scale, a small indentation along the ventral margin of the carapace, and the absence of strong spinelike setae on the fourth article of the antennule. The new species represents only the fifth species of leptostracan known, and the second in the genus Nebalia, from the east coast of North America.