Until now only two species of Cladorhiza have been reported from the SW Atlantic, namely C. diminuta and C. inversa, despite a total of 39 species reported from various parts of the globe. Here we describe a new species, C. nicoleae sp. nov., dredged from 750 m depth on the continental slope off SE Brazil during the French RV ‘Marion Dufresne’ expedition in 1987. It is an erect, pedunculated and club-shaped sponge, 26 mm high and with 12 radially arranged whip-like projections (each up to 3 mm long). The new species differs from its closest relative, C. inversa (redescribed here), by its possession of sigmas and sigmancistras. The holotype of Cladorhiza inversa is also a pedunculated sponge, 1.9 cm tall, with a cup-shaped body with an apical spur-like continuation of the stem and a crown of 16 projections (up to 8 mm long) radiating from the rim of the body.