Lichenomphalia is a lichenized agaric genus characterized by its omphalinoid basidiomes. Lichenomphalia species are associated with unicellular green algae in the genus Coccomyxa and are mainly distributed in polar and alpine habitats. The aim of this work is to describe L. altoandina, a new species from northern Chile that grows among cushion plants over 3000 m above sea level in the Andes Mountains. The species is remarkable for living in highly saline environments, in some cases virtually on salt crusts. Lichenomphalia altoandina differs from other known species and particularly from L. aurantiaca, the most morphologically similar species, in its smooth and broader stipe and its slightly larger spores. Lichenomphalia altoandina is also morphologicaly and ecologically more similar to the core Lichenomphalia Glade. Our phylogenetic study based on nuclear rDNA ITS and partial 28S sequences shows that L. altoandina belongs to the Protolichenomphalia Glade and is sister to an unknown lineage, L. aff. umbellifera, from New Zealand.