The Blue-lined toby Canthigaster caeruleolineata n. sp. is described from the southeast coast of La Reunion, southwestern Indian Ocean, based on a single specimen that may have originated from a deep reef habitat. The species is distinguished within the genus by the few short, oblique blue streaks on the dorsal half of the body, and is characterised as follows: dorsal-fin rays 8; anal-fin rays ca. 7; pectoral-fin rays 15; caudal-fin rays (i) 10 (1); vertebrae 9 + 7 = 16 [damaged]; dorsal-fin origin anterior to anal-fin origin; dorsal half of body greyish brown with relatively few short, oblique blue streaks which are also present in the region between the occiput and the dorsal-fin base, lower part of caudal peduncle with yellow spots; eye yellow; dorsal and anal fins yellow; pectoral fins translucent; caudal fin yellowish grey, with 7 irregular, vertical, wavy blue lines. A molecular analysis revealed that the new species is closely related to C. aziz from deep reefs of the Red Sea.