We investigated the limits of Lepidosperma congestum R.Br. and a putative new species of Lepidosperma Labill. from Victoria and South Australia. Phenetic analyses (flexible UPGMA agglomerative hierarchical fusion and semi-strong hybrid multidimensional scaling) were conducted on a dataset derived from morphological characters scored from herbarium material. The results of our analyses supported the recognition of a new species, which we describe here as Lepidosperma hispidulum G.T.Plunkett, J.J.Bruhl & K.L.Wilson. Our results clarified the differences among L. congestum, L. laeve R.Br. and L. hispidulum, the first two of which have often been misidentified. We also discuss the distribution, habitat and conservation status of L. hispidulum.