The new labrid species, Cirrhilabrus efatensis, is described from six specimens, 42.7–69.4 mm SL, collected from Éfaté Island in Vanuatu in the South Pacific Ocean. The new species, along with C. bathyphilus and C. nahackyi, form a small complex of allopatric closely related species in the southeastern Pacific Ocean, distinguished by a combination of features of the color pattern of terminal-phase males: black anteriormost dorsal-fin spines and membranes, a relatively uniform red-to-orange body color, a yellow anal fin with a blue-violet outer margin, and a dusky nape. The new species differs from C. bathyphilus and C. nahackyi in having a bright-red head and anterior body delimited abruptly from the orange posterior body. The mtDNA barcode COI sequence for C. efatensis is the same as that of C. bathyphilus and C. nahackyi, not surprising in view of the prevalence of shared haplotypes among some members of species complexes in Cirrhilabrus and Paracheilinus. The new species is apparently endemic to Vanuatu, adjacent to the range of C. bathyphilus in the Coral Sea, but not overlapping, and is likely another example of microendemism for the genus.