Ulva shanxiensis L. Chen, J. Feng & S. L. Xie (Ulvaceae), a new species from Shanxi Province in northern China, is described, illustrated, and compared with its closest relatives. The taxon may be confused with U. prolifera O. F. Müller and U. intestinalis L., but is characterized by abundant spinal branches that end with a single-tier cell and more than one pyrenoid. A taxonomic key is provided to facilitate the identification of this new species and closely related freshwater species in China. Molecular studies also confirm the position of the new species among other green algal species of the Ulvaceae.