Hydrocoryne iemanja sp. nov. was found in an aquarium, growing on rhodoliths of coralline algae collected on the south-eastern coast of Brazil (20°40′S 40°2′W). The colonies were reared through maturity in the laboratory. Each colony had up to 7 sessile, long and thin monomorphic zooids, very extensible and flexible, arising from a chitinous, hard dark-brown plate with minute spines. Medusae budded from near the basal part of hydrocaulus, and were released in immature condition, acquiring fully developed interradial gonads 5–7 days after release. Asexual reproduction by longitudinal fission was observed on the hydrocaulus of the polyps, both for those in normal condition and those with injuries. Fission started at the oral region, extending aborally, with a new hard plate formed in the basal part of hydrocaulus. When fission reached the new hard plate, the new polyp detached, becoming free and sinking to the bottom, starting a new colony. Detached polyps were morphologically indistinguishable from other polyps, being able to produce medusae. Mother and daughter polyps undertook subsequent fissions. This mode of longitudinal fission is distinct from other modes of longitudinal fission, a process known for a few species of cnidarians. Further studies of this process may shed light on the understanding of the evolutionary pathways in Cnidaria and animals. Hydrocoryne iemanja sp. nov. is distinguishable from its two congeners by the distinct marginal tentacles of the medusae—short and with a median nematocyst knob—an unambiguous character useful even for the identification of newly liberated medusae.