We describe a new interatheriid notoungulate, Juchuysillu arenalesensis gen. et sp. nov., based on six partial upper and lower dentitions from the early to middle Miocene Nazareno Formation of southern Bolivia. A specimen is also referred to J. arenalesensis from the early middle Miocene (Langhian) locality of Cerdas, Bolivia (ca. 100 km to the northwest). The new species is distinguished by its very small size (ca. 15% smaller than Protypotherium minutum) and the unique combination of shallow ectoloph sulci on P3-4, length of M1 > M2 > M3, trapezoidal upper molars, and absence of a buccal talonid sulcus on m3. A second, larger interatheriid species is present at Nazareno but is not represented by remains sufficiently complete for a more precise identification. A phylogenetic analysis indicates that J. arenalesensis represents a unique lineage within Interatheriinae that diverged after Protypotherium sinclairi but before Miocochilius anomopodus, Caenophilus tripartitus, Miocochilius federicoi, and several species of Protypotherium, including Protypotherium australe. Juchuysillu arenalesensis is one of two small (< ca. 3 kg) typotheres at Nazareno; its body mass is estimated at 1.1 kg. An updated faunal list for the Nazareno Formation includes 19 species of mammals pertaining to seven orders and 15 families; fragmentary turtle (Testudinidae?) and bird (Phorusrhacidae) remains are also present. The precise age of Nazareno Formation vertebrates is unknown, but the presence of at least three notoungulate species shared with Cerdas suggests a similar (∼16–15 Ma) age for the fossil-bearing levels.