We used mitochondrial (COI) and nuclear (Histone H3) genome markers to test the hypothesis that the diversity of Treptopale (Annelida: Chrysopetalidae) in northern Australia comprises more than the two currently known species recently described based on morphology. The molecular phylogeny reveals nine clades. The Treptopale homalos species complex comprises: T. homalos sensu stricto, the only clade occurring all around northern Australia (from Heron Island to Ningaloo Reef); Clade 8 found only at Ningaloo Reef; Clade 2 found only on the Great Barrier Reef and described here as new. Treptopale magdae sp. nov. can be distinguished morphologically by the smaller number of internal ribs of the lateral, main and medial paleael notochaetae. The diverse Treptopale paromolos species complex comprises six clades: Clade 3, Treptopale paromolos sensu stricto and Clade 5 are only found on Australia's NW coast; Clades 4, 6 and 9 are found only in NE Australia. Molecular phylogenetic relationships, especially those using mtDNA COI, suggest that Australian east and west coast populations of the T. homalos and T. paromolos lineages have diverged a number of times. The highest diversity of Treptopale clades is found within the complex micro-patch habitats of NE and NW Australia's major coral reef systems. The low diversity of Treptopale clades found in the north (Darwin Harbour) and northwest (Scott Reef) is related to the presence of less complex reefal systems and a corresponding lack of coral habitat diversity.