A new species of clawed lobster, Dinochelus steeplensis, is reported from the London Clay (Eocene: Ypresian) of England. This is the first report of Dinochelus from the fossil record. The genus was previously known by one recent, deep-water species. Four genera, the fossil Oncopareia and extant Thaumastocheles, Thaumastochelopsis and Dinochelus, comprise the thaumastochelid lobsters, a cladistically cohesive group (minus Dinochelus) formerly given family-level status as Thaumastochelidae Bate, 1888. These lobsters are united, and readily distinguished from other nephropids, by their short, quadrate, pleonal pleura and by their major claw morphology (a short, bulb-like palm and very long, slender fingers bearing acicular dentition). Also described herein is an occurrence of Thaumastocheles sp. from the Miocene of Chile. We now have a monophyletic group of lobsters with a fossil record extending back 90 million years and, with the new fossils reported herein, morphologic end members connected by a range of intermediates. It seems certain that Oncopareia is the least derived of the thaumastochelids, and it is reasonable to conclude that Dinochelus and Thaumastocheles are intermediate between Oncopareia and the most derived genus, Thaumastochelopsis. The new fossil species, D. steeplensis, shows that the carapace and minor claw form of recent thaumastochelids had evolved by the early Eocene (ca. 52–58 mya), and that thaumastochelids were living in outer shelf depths at that time. The new species, being morphologically, stratigraphically, and bathymetrically intermediate between previously known fossil Oncopareia and recent thaumastochelids, is at least consistent with the previously hypothesized retreat of the thaumastochelids off of the shelf and into deeper waters in the Cenozoic.