Evidence is presented that 2MASS J03202839−0446358, a nearby, peculiar, late-type dwarf, is an as-yet unresolved stellar/brown dwarf binary with late-type M dwarf and T dwarf components. This conclusion is based on new low-resolution, near-infrared spectroscopy that reveals a subtle but distinctive absorption feature at 1.6 μm. Previously noted in the peculiar L dwarf SDSS J080531.84+481233.0, this feature is shown to arise from the combination of FeH absorption from an M8.5 primary and pseudo-continuum flux from a T5±1 secondary, as ascertained from binary spectral templates constructed from empirical data. The 1.6 μm feature is also notably present in the combined light spectrum of the known M8.5 + T6 binary system SCR 1845-6357. The binary hypothesis resolves the known discrepancy between the optical and near-infrared classifications of 2MASS J0320−0446 (M8.5 and L1, respectively), while empirical binary templates provide a far superior match to its overall near-infrared spectral energy distribution. 2MASS J0320−0446 is the second very low mass binary to be identified solely by its low-resolution, near-infrared spectrum, and indicates that a wide variety of stellar/substellar binaries could be identified and characterized in this manner without the inherent limitations associated with high resolution imaging or spectroscopy. Subject headings: stars: binaries: general — stars: fundamental parameters — stars: individual (2MASS J03202839−0446358) — stars: low mass, brown dwarfs Visiting Astronomer at the Infrared Telescope Facility, which is operated by the University of Hawaii under Cooperative Agreement NCC 5-538 with the National Aeronautics and Space Administration, Office of Space Science, Planetary Astronomy Program.