A unique new species, Oreocharis scutifolia Z. Xie, Miao Zhang & H. H. Kong, endemic to the Dry and Hot Valley of Jinsha River Basin, Yunnan, China, is described and illustrated here. It is similar to O. cordatula (Craib) Pellegr. and O. aurantiaca Baill. in some morphological characters, but differs in its unique peltate, ovate to oblong leaf blades with emarginated apex, places and types of indumentum, length of peduncles and corolla, also have significant differences in these species. Molecular phylogenetic analysis based on transcriptome data strongly supported O. scutifolia as a new species, while it forms a sister group with O. henryana Oliv., O. cordatula (Craib) Pellegr., O. minor Pellegr. and O. aurantiaca Baill. (ML = 100). Due to its tiny population, narrow distribution range, and the serious threat from human activities, invasive plants and damaged habitat, the new species is assessed as “critically endangered” following the IUCN categories and criteria.