The genus Phasmarhabditis is an economically important group of rhabditid nematodes, to which the well-known slug-parasite P. hermaphrodita belongs. Despite the commercial use of Phasmarhabditis species as an attractive and promising approach for pest control, the taxonomy and systematics of this group of rhabditids are poorly understood, largely because of the lack of diagnostic morphological features and DNA sequences for distinguishing species or inferring phylogenetic relationship. During a nematode sampling effort for identifying free-living relatives of Caenorhabditis elegans in Huizhou City, Guangdong, China, a novel species belonging to the genus Phasmarhabditis was isolated from rotting leaves. Detailed morphology of the gonochoristic P. huizhouensis sp. nov. was described and illustrated. The adult female has a robust body, a relatively short and wide buccal capsule conjoined by a rhabditiform pharynx. Females are characterized by a short cupola-shaped tail end bearing a slender pointed tip, with the junction flanked by a pair of 'rod-like' phasmids. Males have an open peloderan bursa that is supported by 9 pairs of genital papillae and 1 terminal pair of phasmids. P. huizhouensis sp. nov. is morphologically very similar to the type species Phasmarhabditis papillosa but is distinguishable by its male caudal traits. The new species is readily differentiated from other taxa in the genus by its female tail shape. Molecular phylogenetic inferences based on small subunit (SSU) and the D2-D3 domain of large subunit (LSU) ribosomal DNA genes reveal that P. huizhouensis sp. nov. forms a unique branch in both phylogenies which is genetically related to P. hermaphrodita and other parasites such as Angiostoma spp. The host associations of P. huizhouensis sp. nov. and its ability to parasitize slugs are unknown.