Analyses of morphological and molecular data indicate the existence of an unrecognized and unnamed species of soft-haired mouse, genus Abrothrix. Here, we name and describe this new species, which inhabits the Valdivian ecoregion, from the north of Chiloe Island onto the mainland in the Chilean regions of Los Lagos and Los Rios; it also occurs at a single locality in the Argentinean province of Neuquen. Long confused with A. sanborni, the new species presents a unique combination of characters that differentiate it in external, cranial, phallic, and dental terms from its congeners. Phylogenetic analysis, based on cytochrome-b gene sequences, indicates that the new species is sister to a clade formed by the austral species A. lanosa and A. sanborni and differs on average from them by 5.7% and 5.2%, respectively. Results based on the nuclear Fgb-I7 locus are less conclusive regarding the phylogenetic position of the new species but also show its distinction. We comment on the conservation significance of our findings, considering that forests of the Valdivian ecoregion are suffering substantial human disturbance through intensive logging.