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Megatherium urbinai sp. nov. is a new megatheriine ground sloth from Pleistocene beds of the Sacaco area and Tres Ventanas Cave, Peru. This new species is referred to the genus Megatherium based primarily on humeral, femoral, and astragalar morphology. It is characterized by various features, such as a strongly reduced metacarpal-carpal-complex (MCC) and a reduced, oval scaphoid facet of the MCC located at the medial extremity of the bone that does not contact without the McII facet. The distal side of the unciform bears an undivided articular surface for the metacarpals III±V. The lateral femoral margin is nearly rectilinear and the tibia and ®bula do not fuse distally. The astragalus is oriented more medially, the navicular is in a medial position, the ectocuneiform articulates with MtIII±IV, and the MtIV is more inclined laterally than in M. tarijense and M. americanum. M. urbinai is one of the smallest Megatherium species known along with M. altiplanicum. It has the most marked torsion of the pes for the genus. It extends the palaeogeographic distribution of the genus in South America. It is phylogenetically close to other Andean megatheriines and is less specialised than M. tarijense, and does not belong to the clade constituted by [M. altiplanicum ‡ M. americanum].