A new miniature species of Characidium is described from the upper Rio Paraguay basin, Brazil. The new species can be diagnosed from all congeners by the presence of a dark-brown humeral blotch, vertically elongated (spanning 5 to 7 horizontal scale rows), with the shape of an upside-down acute triangle. Additionally, it can be diagnosed by a short lateral line (6 to 8 perforated scales), the absence of a conspicuous peduncular blotch, a lower number of principal caudal-fin rays (14-16) and by absence of the adipose fin. The new species is the smallest species of the genus; the largest specimen was 19.3 mm standard length.