Divergence between evolutionary lineages is not always marked by the development of obvious species-specific characters, whether morphological, physiological, or ecological. Consequentially, extant biodiversity can easily be overlooked. These cryptic species are often not recognized until genetic data are in hand, as is the case for the novel taxon we describe here. Carex viridistellata in Carex section Ceratocystis is an endemic species restricted to calcareous wetlands of Michigan, Ohio, and Indiana, where it has previously been collected as Carex cryptolepis. Crosses between Carex viridistellata and Carex cryptolepis produce sterile F1 hybrids, and the two species are differentiated by a number of subtle morphological characters, as well as aspects of their respective ecologies. Phylogenetic analyses of nrDNA strongly indicate monophyly of Carex viridistellata and its sister species relationship with the North Carolina narrow endemic Carex lutea. Both species constitute a distinct lineage within a generally poorly resolved section Ceratocystis. This work highlights the broad importance of cryptic taxa, with implications for fields ranging from population genetics to conservation and restoration.