Palaemoncarteri (Gordon, 1935) and Palaemonivonicus (Holthuis, 1950) are morphologically similar species of South American freshwater shrimps. Past studies have questioned the taxonomic status of both species, which are supposed to have partially sympatric geographic distributions in the Amazon basin. We analyzed a 550 bp fragment of the mitochondrial 16S rRNA gene from these Amazonian Palaemon species as well as from 11 palaemonids as the outgroup. Additionally, we checked diagnostic characters of the genus and family as well as other morphological characters that have been little explored before. Palaemoncarteri and Palaemonivonicus are allocated in two sister lineages, with wide genetic divergence and little morphological differentiation. The divergence time between these lineages was estimated as approximately 10 million years ago. Both molecular and morphological data support the taxonomic validity of both Palaemoncarteri and Palaemonivonicus, refuting the hypothesis of synonymy. In addition, a new species, Palaemonyuna sp. n., closely related to Palaemonivonicus, is described. Our findings indicate that these species can be differentiated using the projection of the anterolateral margin and anterolateral spine of the first antennular segment, shape of the rostrum, and relative size of the appendix masculina.