Abstract. We present visible and near-infrared photometry and spectroscopy of LS-RCrA 1, a faint, very late-type object (M 6.5-M 7) seen in the direction of the R Coronae Australis star forming complex. While its emission spectrum shows prominent features of accretion and mass loss typical of young stellar objects, its underlying continuum and photometric properties are puzzling when trying to derive a mass and age based on pre-main sequence evolutionary tracks: the object appears to be far too faint for a young member of the R Coronae Australis complex of its spectral type. We speculate that this may be due to either its evolution along pre-main sequence tracks being substantially altered by the intense accretion, or to a combination of partial blocking and scattering of the light of the object by a nearly edge-on circumstellar disk. The rich emission line spectrum superimposed on the stellar continuum is well explained by an intense accretion process: the Hα, CaII infrared triplet, and HeI 6678 lines show equivalent widths typical of very active classical T Tauri stars. The near-infrared observations show anomalously weak spectral features and no significant excess emission in the K band, which we tentatively interpret as indicating line filling due to emission in a magnetic accretion funnel flow. At the same time, numerous, strong forbidden optical lines ([OI], [NII] and [SII]) and H2 emission at 2.12 µm suggest that the object is simultaneously undergoing mass loss, providing another example that shows that mass loss and accretion are closely related processes. Such an intense accretion and mass loss activity is observed for the first time in a young stellar object in the transition region between low mass stars and brown dwarfs, and provides a valuable observational test on the effects of accretion on the evolution of objects with such low masses.