The original description of
Marphysa sanguinea (Montagu, 1813) from southern England is brief and no type material appears to be extant. This has resulted in a species that has been recorded from many localities around the world, typically with no description being given. To clarify the status of this species, a neotype of
Marphysa sanguinea has been designated from the type locality and a full description of the species given, together with information on its reproductive biology. The '
M. sanguinea' commonly recorded from southeast Queensland, Australia is newly recognised as a new species and described. The Australian species is the basis of an important bait industry for amateur recreational fishermen. Based on the description of the neotype of
Marphysa sanguinea, this species does not occur in Australian waters; all records of
Marphysa sanguinea from outside the region of the type locality should be re-examined. We suggest its reported cosmopolitan distribution unlikely to be valid.