A new species of the genus Oscheius, O. saproxylicus sp. n., collected in decaying wood obtained from an orchard in Southern Iberian Peninsula, is reported. A detailed description, including morphometrics, LM and SEM images, and molecular (18S and 28S rDNA genes) information is provided. The female is characterized by a moderately long body, lateral field with three longitudinal ridges, midbody vulva, and conical tail with acute tip. It was distinguished from its closest relative, O. dolichura, by a shorter tail and longer rectum. The male was not found. Morphological and molecular data support its belonging to Dolichura-group. Molecular analyses show that both Insectivorus and Dolichura groups are related to each other, being proposed as subgenera of the genus Oscheius as Oscheius and Dolichorhabditis. Finally, an updated taxonomy of the genus is presented, with generic and subgeneric diagnoses, list of species and a key to their identification.