Peanut worm (Sipunculus nudus) is a cosmopolitan species mainly distributed in tropical and subtropical coastal waters. Analysis of the mitochondrial cytochrome c oxidase subunit I (COI) gene sequences among S. nudus from GenBank revealed high genetic variation (p-distance, 0.115-0.235; k2p, 0.128-0.297) and paraphyletic relationships. These indicated misidentification and/or cryptic diversity may be present in the genus Sipunculus. To understand the genetic diversity and to manage the recourse of S. nudus, we collected specimens from coastal waters of southern China and Taiwan. In the phylogenetic topology, specimens can be separated into four distinct clades; three of these clades (clade A, B and C) were only represented from this region (southern China and Taiwan), but the clade D grouped with individuals from Central America (Atlantic coast). Furthermore, individuals of clades A and D were collected at the same location, which does not support the hypothesis that this genetic break reflects contemporary geographical isolation. The four distinct clades observed among coastal waters of southern China and Taiwan indicated underestimated diversity. It is noteworthy that the cryptic diversity is vulnerable under high pressure of human activity.