Polydorella smurovi sp.n. is described from an underwater coral bank near the Dachlak Archipelago (Red Sea). This new species has alternating sexual and asexual (paratomy) reproduction, short caruncle, specialised broom-like setae on segment 5 and capillary setae in the neuropodia of the same segment. Worms inhabited the surface of a red sponge covering a block of a dead coral. The genus Polydorella Augener is re-established and its diagnosis altered.