A new species of Hydrolithon is described from mesophotic habitats, between 30 and at least 76 m depth, off La Parguera, Puerto Rico, and St Thomas, Virgin Islands (Caribbean Sea). Its encrusting thallus covers corals and rocks. Hydrolithon abyssophila sp. nov. is distinctive in developing bisporangia that are about twice as large as its congeners and in lacking both perithallial protuberances and trichocytes in horizontal or vertical groups. It reproduces primarily by uninucleate bispores that presumably recycle the parental phase. Unfertilized carpogonia were observed in one collection suggesting the rare occurrence of gametophytic reproduction in the species.