A new, potentially ichthyotoxic gymnodinioid dinoflagellate, Karenia umbella de Salas, Bolch & Hallegraeff, is described from Tasmanian coastal waters, Australia. It is characterized by light and electron microscopy of field samples and laboratory cultures, as well as large-subunit ribosomal DNA sequences and high-performance liquid chromatography pigment analyses of two cultured strains. The new Karenia species has a straight apical groove and contains fucoxanthin derivative carotenoid pigments, typical of the genus. Karenia umbella differs from its closest relative K. longicanalis in its larger size, longer epicone with a finger-like sulcal intrusion, asymmetrically shaped hypocone, irregularly shaped chloroplasts, and presence of six or eight radial furrows on the epicone surface. It differs from K. digitata in its significantly larger size and the shape of the epicone and hypocone. Genetically, this species is distinct from the dorsoventrally flattened Karenia species K. mikimotoi, K. brevis, and K. brevisulcata.