Multigene molecular revision of a series of specimens of the rare spongobiotic palaemonid shrimp genus, Onycocaridella Bruce, 1981, collected predominantly from Papua New Guinea, has doubled the known species diversity to six. Of the previously known species, O. monodoa (Fujino & Miyake, 1969) and O. stenolepis (Holthuis, 1952) were analysed in the present study, whereas sequenceable specimens of the type species, O. prima Bruce, 1981, were not available. The present molecular analysis (combined COI, 16S, H3 markers) recovered six separate genetic lineages, indicating the presence of four undescribed species. Three of the latter are described in the present study. Remarkably higher known species diversity of Onycocaridella is thus recorded from a single geographic region – Papua New Guinea. The increased diversity reported here was discovered by application of complementary collecting techniques (hand picking, stone brushing, dead-coral sorting, suction sampling). One of the present new species is also reported from Australia, and O. monodoa is newly recorded from New Caledonia. A revised diagnosis of the genus and a key to identification of all known species of Onycocaridella are provided.