Lactifluus parvigerardii, a new species from subtropical southwestern China, is described. Worldwide, this is the third representative of Lactifluus subgen. Gerardii with coloured latex, as in the Asian L. ochrogalactus and the American L. petersenii. Microscopically, this new species differs from L. ochrogalactus in having thin-walled hyphae in the pileipellis and robust macrocystidia in the hymenium. Compared with L. petersenii, L. parvigerardii has distant lamellae and heavily ornamented spores. Despite this morphological similarity to the L. ochrogalactus-L. petersenii clade phylogenetic analysis placed L. parvigerardii close to L. uyedae, taking a basal position in a strictly pleurotoid subclade. It is a key species demonstrating additional morphological and molecular diversity within Lactifluus subgen. Gerardii.