Butterflies associated with xerophytic environments of the Andes have been little studied, and they exhibit high levels of endemism. Herein Dione (Agraulis) dodona Lamas & Farfán, sp. nov. (Nymphalidae; Heli-coniinae) is described, distributed on the western slopes of the Andes of Peru and northern Chile, between 800 and 3,000 m elevation. Adults of both sexes, and the immature stages, are described and illustrated based on light and scanning electron microscopy. The immature stages are associated with Malesherbia tenuifolia D. Don (Passifloraceae) found in xeric environments, representing a new record of this genus as a host plant for the subfamily Heliconiinae. Conspicuous morphological differences are presented for all stages at the generic level. Based on a phylogenetic analysis of the COI barcode mitochondrial gene fragment, D. (A.) dodona Lamas & Farfán, sp. nov. is distinguished as an independent lineage within the Agraulis clade of Dione, with ca. 5% difference to congeneric species.