Abstract Gravitational waves from coalescing neutron stars encode information about nuclear matter at extreme densities, inaccessible by laboratory experiments. The late inspiral is influenced by the presence of tides, which depend on the neutron star equation of state. Neutron star mergers are expected to often produce rapidly rotating remnant neutron stars that emit gravitational waves. These will provide clues to the extremely hot post-merger environment. This signature of nuclear matter in gravitational waves contains most information in the 2–4 kHz frequency band, which is outside of the most sensitive band of current detectors. We present the design concept and science case for a Neutron Star Extreme Matter Observatory (NEMO): a gravitational-wave interferometer optimised to study nuclear physics with merging neutron stars. The concept uses high-circulating laser power, quantum squeezing, and a detector topology specifically designed to achieve the high-frequency sensitivity necessary to probe nuclear matter using gravitational waves. Above 1 kHz, the proposed strain sensitivity is comparable to full third-generation detectors at a fraction of the cost. Such sensitivity changes expected event rates for detection of post-merger remnants from approximately one per few decades with two A+ detectors to a few per year and potentially allow for the first gravitational-wave observations of supernovae, isolated neutron stars, and other exotica.