Two new species of the spongicolid shrimp genus Microprosthema Stimpson, 1860 are described and illustrated on the basis of material collected recently in Australia and Japan. Type specimens of Microprosthema ningaloo sp. nov. were collected on Ningaloo Reef, Western Australia, whereas type specimens of Microprosthema pallidum sp. nov. were collected on a coral reef off Ishigaki Island, Ryukyu Archipelago, southern Japan. Microprosthema ningaloo sp. nov. and M. pallidum sp. nov. differ from all other species of the genus by a combination of morphological characters, including the gill-exopod formulae, and by their diagnostic colour patterns. This study increases the total number of species described in the genus Microprosthema to 16, nine of them in the Indo-West Pacific. In addition, new records are provided for M. lubricum Saito & Okuno, 2011 (Guam), M. plumicorne (Richters, 1880) (Red Sea, Mariana and Marshall Islands, French Polynesia), M. scabricaudatum (Richters, 1880) (Red Sea, Glorieuses and Tuamotu Islands), and M. validum Stimpson, 1860 (Red Sea, Madagascar, Singapore, French Polynesia), significantly extending their previously known distribution ranges.