The snapping shrimp family Alpheidae Rafinesque, 1815 includes numerous species, most of which present controversial geographical distributions. The disjunct distribution of Alpheus simus Guérin-Méneville, 1856 in the western Atlantic, from Florida to the south of the Caribbean Sea and then from Rio Grande do Norte to Bahia in Brazil, suggests that Brazilian material may belong to an undescribed species. The examination of specimens previously identified as A. simus revealed the distinct morphology of material from Brazil, resulting in the description of a new species based on morphological and molecular evidence. The specimens were collected from fragments of fire coral at the Parque Municipal Marinho do Recife de Fora, Porto Seguro, Bahia, Brazil. Alpheus coralvivo sp. nov. belongs to the A. obesomanus group and is morphologically similar to A. simus (northwestern Atlantic) and A. saxidomus Holthuis, 1980 (eastern Pacific), differing mainly in the stylocerite and scaphocerite lengths and in the large gap between the cephalothorax and pleuron of the first pleonal segment. Molecular analysis using the mitochondrial cytochrome oxidase subunit I gene support the existence of the new species.