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The genus <i>Smeagol</i> consists of five named species of air-breathing marine slugs (restricted to southern Australia and New Zealand) and three undescribed taxa from southern Japan. Only one species, <i>S. hilaris</i>, is known to be from New South Wales (NSW), and it previously had a known distribution limited to one site, Merry Beach on the south coast. This diminutive invertebrate is classified as critically endangered in NSW due to its extremely restricted distribution and concern about its historically declining numbers. Accordingly, the aims of this study were to survey the known population of <i>S. hilaris</i> at Merry Beach and to explore other potentially suitable sites, using a visual census method, to determine if further populations or species exist in NSW. The resulting quantitative surveys of the known population and a new population at Storm Bay, Kiama, NSW, are reported here. DNA barcoding of a ~650 bp segment of the mitochondrial cytochrome <i>c</i> oxidase I (COI) gene for several individuals from each population confirmed the conspecificity among the two populations. The population at Merry Beach was found to remain viable, while the discovery of the new population of <i>S. hilaris</i> represents a doubling of the known global populations of this species. Details of the highly-specialised niche habitat occupied by <i>Smeagol</i> in New South Wales and recommendations for ongoing management are documented.