A new freshwater alga species of Ulvella shanxiensis, is found in the circulating neutral water spring in China (Shanxi Province), growing epilithic and epiphytic on other substrates. This new species is characterized by olive-green, disc-shaped hollow thallus with irregularly vesicular morphology, which composed of 2–3 layers cells. Most characteristics were in agreement with Ulvella, but distinguished from the other freshwater members by thalli dimensions and cell diameter. In addition to describing the morphological structures of U. shanxiensis in detail, phylogenetic analysis based on sequences of the rbcL and 18S rDNA gene placed the algae in single clade with two samples, and demonstrated the separation between U. shanxiensis and other Ulvella species with a considerable sequence distance. Comparing with U. bullata, the internal transcribed spacer secondary structure of the new species has some compensatory base changes in 1 Helix and hemi-CBCs in 2–3 Helix, differed in several ways from that of other Ulvella algae. Consequently, these results of morphological observation and phylogenetic analysis suggest this alga as a new species, and bring a new record in the total number of recognized freshwater Ulvella species in China.