A new species in the family Megasporaceae, Oxneriaria kaghanensis is described and illustrated from Pakistan. A comparative morpho-anatomical study and ITS-based molecular analyses confirmed its position within the recently resurrected genus, Oxneriaria. Oxneriaria kaghanensis is morphologically and phylogenetically closely related to O. kohistaniensis. It is characterized by whitish to whitish grey thallus, areoles 0.8–1.7 mm, apothecia 0.7–1 mm, hymenium 95–110 μm, hypothecium 45–60 μm, asci 79–90 × 29–38 μm and ascospores 17–22 × 10–14 μm. Keywords: Novel species; ITS; Taxonomy; Phylogeny.