New information on the genus Psychostrophia Butler, 1877 is provided. A new species, Psychostrophia micronymphidiaria Huang & Wang, sp. nov., is described from western, northern and northwestern Yunnan Province, southwestern China; it is similar to P. nymphidiaria (Oberthür, 1893) which is widely distributed in eastern, southern, western and central China. A new synonym is established: Psychostrophia nymphidiaria (Oberthür, 1893) (= Stiboges lushanica Chou & Yuan, 2001, syn. nov.). Some other taxonomic and nomenclatural notes on the genus are presented. A key to the species of the genus Psychostrophia is provided.