A new genus and species of megalonychid sloth, Zacatzontli tecolotlanensis n. gen. n. sp., is described from the late Hemphillian of Jalisco, Mexico. Comparison and analysis of the type specimen, a mandible, with other megalonychid sloths shows a closer relationship to South American taxa than those from North America or the Caribbean. This suggests that during the early stages of the Great American Biotic Interchange there were two separate dispersal events of megalonychid sloths—an earlier one represented by Pliometanastes and the later one by Zacatzontli n. gen. While the morphology of the spout of Zacatzontli more closely resembles that of Megalonyx, based on the current record, Zacatzontli does does not enter North America until after the evolution of Megalonyx from Pliometanastes. The role of the northern neotropics in South America as a staging area for South American taxa that entered North America is discussed.