Abstract We hereby report the discovery of ATLAS17jrp as an extraordinary tidal disruption event (TDE) in the star-forming galaxy SDSS J162034.99+240726.5 in our recent sample of mid-infrared outbursts in nearby galaxies. Its optical/UV light curves rise to a peak luminosity of ∼1.06 × 10⁴⁴ erg s⁻¹ in about a month and then decay as t ^−5/3 with a roughly constant temperature around 19,000 K, and the optical spectra show a blue continuum and very broad Balmer lines with FWHM ∼ 15,000 km s⁻¹, which gradually narrowed to 1400 km s⁻¹ within 4 yr, all agreeing well with other optical TDEs. A delayed and rapidly rising X-ray flare with a peak luminosity of ∼1.27 × 10⁴³ erg s⁻¹ was detected ∼170 days after the optical peak. The high MIR luminosity of ATLAS17jrp (∼2 × 10⁴³ erg s⁻¹) has revealed a distinctive dusty environment with a covering factor as high as ∼0.2, which is comparable to that of a torus in active galactic nuclei but at least one order of magnitude higher than normal optical TDEs. Therefore, ATLAS17jrp turns out to be one of the rare unambiguous TDEs found in star-forming galaxies, and its high dust-covering factor implies that dust extinction could play an important role in the absence of optical TDEs in star-forming galaxies.