A gonadotropic microsporidian parasite, Obruspora papernae gen. et sp. nov. (Microsporidia: Enterocytozoonidae), is described from Callionymus filamentosus (Teleostei: Callionymidae) in the Mediterranean Sea. The host, a Red Sea invasive species which entered the Mediterranean through the Suez Canal, was first collected in the Levant Basin in 1953, whereas its parasite went unobserved until 2008. Analysis of partial small subunit ribosomal gene sequences (SSU rDNA) placed the new species within the Nucleospora, Desmozoon, and Paranucleospora clade, and as it differs from each of them, it is assigned to a new genus. The development of the parasite is described, and the biological mechanisms underlying this parasite-host system are analyzed. Prevalence of infection approached 80% in female samples throughout most of the year. Males showed no signs of infection, but parasite rDNA was detected in male internal organs. The parasite-induced xenomas progressively occupied and eventually replaced much of the ovary, in some cases producing effective castration. Despite high levels of parasite infection, current trawl fishery statistics indicate that the abundance of Mediterranean populations of the host remains high. The parasite impact on the host population dynamics is unclear. Possible effects of the new microsporidian parasite on the reproductive effort of C. filamentosus and the potential role of another parasite, the ectoparasitic copepod Lernanthropus callionymicola, as an additional host in the life cycle of O. papernae, require further investigation.