Previous evidence regarding morphology led us to examine an exhaustive set of specimens assigned to Alpheus heterochaelis Say, 1818 and closely allied species, in order to test for the existence of possible cryptic taxa. The analysis of material assignable to this species from the states of Pará, Bahia and São Paulo in Brazil, and from Venezuela and Colombia revealed minor morphological differences between these specimens and others that could be confidently identified as A. heterochaelis from the eastern USA coast and the Gulf of Mexico, such as the absence of spiniform setae on the ischium of the fifth pereiopods (vs present in A. heterochaelis s.s.). Additionally, genetic analysis using the ribosomal 16S subunit also indicated levels of genetic difference supporting the existence of a cryptic species and revealing that A. heterochaelis is, in fact, a species complex. Thus, a new species, A. petronioi n. sp. is described and illustrated for the material from northern South America and Brazil. The new species is also compared with other, similar species of Alpheus Fabricius, 1798 in terms of morphology and DNA sequences in a phylogenetic context.