A new species of Toxodontia (Mammalia, Notoungulata), Pampahippus secundus sp. nov., is described based on remains recovered from outcrops of the Lumbrera Formation exposed in Salta Province, northwest Argentina. The material studied consists of mandibular, maxillary, and premaxillary fragments with complete and incomplete teeth representing at least three individuals. It differs from the type species P. arenalesi by its smaller size and the presence of several dental features: I2 smaller than the I1 and I3, paraconule absent on the P3, upper molars wider than long and subquadrangular, with a single crista projecting from the ectoloph, strong mesiolingual cingulum surrounding the protocone on the M1, conspicuous metacone fold on the ectoloph of M1 and M2, and absence of labial cingulids on lower molars. In order to determine the phylogenetic position of P. secundus as well as different Paleogene notoungulates of northwestern Argentina, we performed a cladistic analysis. This analysis supports the paraphyly of Notohippidae proposed by previous authors and validates the monophyly of the genus Pampahippus, which ranks as a relatively basal taxon within Toxodontia. This contribution illustrates the significant and yet poorly known diversity of Paleogene toxodontians from northwestern Argentina and the importance of their study in the reconstruction of the evolutionary history of Notoungulata.