Coral reefs are in rapid decline on a global scale due to human activities and a changing climate. Shallow water reefs depend on the obligatory symbiosis between the habitat forming coral host and its algal symbiont from the genus Symbiodinium (zooxanthellae). This association is highly sensitive to thermal perturbations and temperatures as little as 1°C above the average summer maxima can cause the breakdown of this symbiosis, termed coral bleaching. Predicting the capacity of corals to survive the expected increase in seawater temperatures depends strongly on our understanding of the thermal tolerance of the symbiotic algae. Here we use molecular phylogenetic analysis of four genetic markers to describe Symbiodinium thermophilum, sp. nov. from the Persian/Arabian Gulf, a thermally tolerant coral symbiont. Phylogenetic inference using the non-coding region of the chloroplast psbA gene resolves S. thermophilum as a monophyletic lineage with large genetic distances from any other ITS2 C3 type found outside the Gulf. Through the characterisation of Symbiodinium associations of 6 species (5 genera) of Gulf corals, we demonstrate that S. thermophilum is the prevalent symbiont all year round in the world's hottest sea, the southern Persian/Arabian Gulf.