Collecting much-needed information on the taxonomy, distribution, and ecology of cave-dwelling shrimp is vital for addressing the urgent challenges in conservation biodiversity in fragile cave ecosystems. Caridina incolor sp. nov., a new atyid shrimp from an underground stream of Yaoshui Cave, Daqikong scenic area, Libo County, Guizhou Province, southwestern China is described based on morphology and DNA analysis (mitochondrial COI). Caridina incolor sp. nov. differs from epigean congeners by its smaller eyes which range from reduced to completely blind; colorless body and appendages; long stylocerite and sixth abdominal segment; and relatively large eggs. In comparison to other cave species, Caridina incolor sp. nov. presents a long rostrum and stylocerite; slender sixth abdominal segment; and unique shape of the appendix masculina. Data on the habitat, ecology, and levels of threat are provided and suggest that it should be categorized as Critically Endangered (CR) under the current IUCN criteria.