Leptojulis lambdastigma, new to the South China Sea, is identified from a specimen collected from the Hainan Island. Diagnostic characteristics for this species as follows: body moderately elongate, the depth 3.7﹣4.0 in standard length (SL), head length 3.1﹣3.6 in SL; snout length 2.7﹣3.3 in head length (HL), pectoral fins 1.45﹣1.65 in HL; head naked; 2 pairs of canine teeth anteriorly in both jaws, the second pair recurved and outcurved. Dorsal fins Ⅸ-12, anal fins Ⅲ-12, pectoral fins i (unbranched) +11﹣12 (branched); lateral line complete, and lateral-line scales 27; a large V-shaped dark mark on nape; an irregular black blotch below lateral line above pectoral fin. Color when fresh with 2 yellow stripes on sides of head, the first from upper lip through eye to end of the basal part of caudal fin, the second beginning at corner of mouth, passing the basal part of pectoral fins and extending to the basal part of caudal fin; one faintly yellow stripe on the back near to dorsal fin; pectoral fins brown to red anteriorly, and pale colours posteriorly; anal fins pale blue; lower and upper parts of caudal fin separated, slight blue and orange. Color of preserved in formalin is significantly different from the fresh specimen, body with a pale color, and the stripes disappeared except for the V-shaped dark mark. It differs from the similar L. urostigma in: nape with the V-shaped dark mark (absent in L. lambdastigma), and without the dark blotch at base of caudal fin found in L. lambdastigma. L. lambdastigma has been recorded from Gulf of Thailand, Philippines, Malaysia, and Taiwan of China to date.