Virilastacus rucapihuelensis, a new species of burrowing parastacid, is described from the semi-marshland area of Rucapihuel on the Coastal Cordillera, province of Osorno, southern Chile. This is the second species in this genus, and is characterized by: 1) intersex specimens with male cuticle partition; 2) shorter, more robust, straight, and more widely separated phallic papillae than those of Virilastacus araucanius (Faxon, 1914); 3) females with a weakly calcified anteroventral flap on the pleura of the second abdominal somite; 4) anterior lobe of the epistome triangular with smooth anterolateral margins; 5) medial portion of P1 dactyl bearing two rows of tubercles; 6) telson resembling a rectangle, with small, blunt lateral spines; 7) genetic separation from V. araucanius; and 8) a high percentage (81.3%) of intersex specimens with supernumerary gonopores.