Lasiopetalum prodigiosum C.F.Wilkins, L.M.Copel. & K.A.Sheph., is recognised here as a new species that is currently only known from eight populations across centraleastern New South Wales to south-eastern Queensland. This species has historically been confused with L. ferrugineum Sm. ex Andrews and L. macrophyllum Graham but is supported as distinct based on molecular and morphological data. This paper provides diagnostic features that distinguish L. prodigiosum from other known species, as well as notes on its current distribution, and a key to allied species.