A new cave species of atyid shrimp of the genus Caridina H. Milne Edwards, 1837 was discovered during a survey of a subterranean habitat in southwestern Iran (Khuzestan Province, Tashan Cave). This is the first record of a cave atyid shrimp in Iran and the first documented occurrence of a Caridina species inhabiting sulphidic groundwater. Phylogenetic analyses and genetic distances support the status of Caridina tashanica sp. nov. as a distinct species, closely related to C. shahrazadae. Morphologically, the new species is characterised by reduced eyes and pigmentation, and by an extremely elongated rostrum with numerous teeth. Males have specific, triangular endopodite of pleopod I, and a rod-like appendix masculina of pleopod II with numerous long setae. Ovigerous females lay relatively large, oval, white eggs, which clearly indicate a landlocked life cycle. This study contributes to the knowledge of atyid shrimps in the Middle East and to the subterranean biodiversity of the sulphidic Tashan Cave ecosystem in Iran.