We describe Cavernocypris xiangi sp. nov., the eighth nominated species of the genus, from two localities in Yunnan Province of southwestern China. As a member of Cavernocypris Hartmann, 1964, C. xiangi sp. nov. has short swimming setae on the second antenna, and its left valve overlaps the right valve on the ventral side. It can be distinguished from its congeners by the elongated, conspicuously pitted carapace and large lateral shield of the hemipenis. Along with two other yet unnamed species, we present the first reports of Cavernocypris from China and also the most southerly records of the genus worldwide, significantly expanding its known geographical range. Up to now, five of the eight named Cavernocypris species and the two unnamed members recovered in this study are restricted to East Asia, which could be a hotspot of diversity for the genus. The large morphological variation and the wide, patchy distribution of Cavernocypris imply that diversification in the genus has a long geological history.