Malmgrenia louiseae sp. nov. is described from both the western Mediterranean in the Gulf of Lions, and the north-east Atlantic from off Portugal and the Bay of Biscay. The species was found in muddy sediments in shallow water and is possibly associated with echiurids or synaptid holothurians. Malmgrenia louiseae sp. nov. can be clearly distinguished from all other known Malmgrenia species by the presence of an infra-acicular process in addition to the supra-acicular process on the acicular lobe of the neuropodia, the lack of microtubercules on the elytra, two kinds of notochaetae (stout with blunt tip and slender with fine pointed tip), and exclusively unidentate neurochaetae. An identification key to the north-east Atlantic and Mediterranean Malmgrenia species is provided.