Orchidaceae, a highly diverse family of angiosperms, exhibits remarkable ecological and morphological adaptations, with most of its species being epiphytic or terrestrial. Nonetheless, their occurrence in aquatic and wetland habitats in the tropics is relatively uncommon, with only a few species adapted to these environments. Consequently, our current understanding of orchids inhabiting wetland ecosystems is limited. This research focuses on Sarcoglottis woodsonii, an aquatic orchid species exclusively found in palustrine wetlands of southern Central America. Previously considered endemic to western Panama, our recent collections (the first since 1940) extend its known distribution to include southern Costa Rica. We provide an updated description, a modern illustration, a conservation assessment based on IUCN criteria, and novel ecological data that shed light on its aquatic habit. With this recent discovery, the number of known Sarcoglottis species in Costa Rica stands at six. We provide a preliminary survey of reported wetland and aquatic orchid species from the Neotropics and give novel definitions for both wetland and aquatic plants. We also present an inventory of the vascular plant species found in the Cañas Gordas/Valle Azul wetland in Costa Rica, where S. woodsonii occurs. This study enhances our understanding of orchid diversity in wetland ecosystems and emphasizes the importance of conserving these unique habitats, often inadequately protected and surrounded by heavily altered ecosystems.