A new species of Laeonereis from a shrimp farm associated with a subtropical coastal lagoon on the Mexican Pacific coast is described. The new species is characterized by a deep anterior groove on the prostomium, which is shared only with L. culveri. However, longer tentacular cirri extending back to the anterior margin of chaetiger two, the number of papillae of each group on the maxillary ring of the pharynx, and the relative size of the homogomph falcigers in the new species, allow us to separate the two species. Although the species has not been previously detected in the coastal lagoon surrounding the shrimp farm, we postulate that L. watsoni n. sp. is likely to be part of the invertebrate communities of the upper parts of similar coastal lagoons that are common along the tropical coasts of Mexico.