Christened the Annamite rabbit after the mountain range, it has short ears, a short tail, yellowish fur with black stripes on the back and a rust-red rump.
Rob Timmins, a British naturalist working at the time for the Wildlife Conservation Society based in New York, spotted the first specimen of the rabbit for sale at a meat market in Laos in 1995.
Scientists have never encountered the rabbit alive, but one was caught on film by a camera rigged to photograph passing animals in a nature reserve across the border in Vietnam in 1998.
"It seems to be very shy, very elusive," Timmins said. It is not known how many rabbits there are.
The Annamite rabbit looks very similar to a species found on the Indonesian island of Sumatra, so it was not clear at first that it was a new species.
But DNA analysis revealed considerable genetic differences between the two, said Diana Bell, a biologist specializing in rabbits at the University of East Anglia in Norwich, Britain. She is part of the team that reported the finding in Thursday's issue of the journal Nature.
The DNA indicates that the two species diverged around 8 million years ago, when Sumatra was connected to the Asian mainland, Bell said.
Four other previously unknown animals have been discovered in Vietnam and the surrounding countries in the last decade after biologists have started exploring the region.