Apistogramma paucisquamis n. sp. is described on the basis of 96 specimens, 12.8-31.2 mm, from the middle and lower Rio Negro in Brazil. The species is distinguished from all other Apistogramma species by having 12 instead of 16 circumpeduncular scale rows. The impressive large mouth may correlate with plankton feeding or, more likely, with the frontal threat display. Apistogramma paucisquamis keeps the mouth wide open during frontal threat display, whereas the majority of the Apistogramma species keep it closed during the same behaviour. Open mouth frontal threat display is shared with species of the A. agassizii and A. cacatuoides species groups, and A. paucisquamis may be closely related to these, although precise relationships cannot be discerned on the basis of available information.