We define key characters distinguishing between the genera Neobuthus Hirst, 1911 and Butheolus Simon, 1882. Butheolus ferrugineus Kraepelin, 1898 is transferred to the genus Neobuthus which includes only African species, in contrast to the genus Butheolus which now includes only species inhabiting the Arabian Peninsula. Neobuthus awashensis sp. n. from Ethiopia is described and compared with two closely related species, Neobuthus ferrugineus (Kraepelin, 1898) comb. n. and Neobuthus berberensis Hirst, 1911. Recent collection of 78 specimens enabled direct comparisons of all three closely related species from their respective localities and discovery of characters hitherto not apparent from discolored specimens preserved for many years in alcohol. We photographically illustrate true coloration and pubescence for these three species, provide first information about their ecology, and present photographs of their habitats and localities. Neobuthus berberensis Hirst, 1911, is lightest colored with pubescence nearly absent, and is adapted to sandy desert conditions in the vicinity of Berbera City (Somaliland). Rocky deserts in Djibouti, Ethiopia (first report), Somaliland and Somalia host the widely distributed Neobuthus ferrugineus (Kraepelin, 1898) comb. n., which varies in color and bears sparse long setae (female) or spiniform setae (male). Neobuthus awashensis sp. n. is the darkest-colored of the three and possesses pubescence similar to N. ferrugineus comb. n., from which it differs in having a longer and narrower pedipalp femur. We document strong sexual dimorphism in all three species, the lack of knowledge of which had caused the female holotype of Neobuthus ferrugineus (Kraepelin, 1898), comb. n. and the male holotype of Neobuthus berberensis Hirst, 1911 to be placed in different genera Butheolus Simon, 1882 and Neobuthus Hirst, 1911