A new species of the previously monotypic catfish genus Phreatobius is described from an artificial well in the village of Rio Pardo, located 90 km south of the city of Porto Velho, State of Rondônia, Brazil, in the drainage area of the Rio Branco (Rio Madeira system, Amazon basin). Phreatobius dracunculus n. sp. differs from its only congener, P. cisternarum, by the absence of eyes (vs. present), the lack of dark integumentary pigmentation (vs. faint dark pigment always present), the presence of five pectoral-fin rays (vs. four), ventral procurrent rays 11-13 (vs. 22 to 26), dorsal procurrent rays 29-31 (vs. 42 to 50), fewer vertebrae (52 or 53 vs. 59 to 64) and the larger pseudotympanus. The new species shows all diagnostic characters so far proposed for Phreatobius, including an unusual red coloration in life. The localities of the two species of Phreatobius are approximately 1900 km apart. That, in association with their peculiar and mostly inaccessible habitats, indicates that the genus may be widely distributed in the Amazon basin.