An anterior part of skull was recently found near Xiayangwan in Guanghe County, Gansu Province, presumably from the Liushu Formation. The skull represents a new species of Pararhizomys, named as Pararhizomys parvulus. The new species is characterized by: small size, upper molars higher crowned and mesio-lingually hypsodont with sinus deeper than mesosinus; sinus and mesosinus in M3 being transverse and overlapping each other, but sinus longer than mesosinus on occlusal view. Based on shared apomorphies (lingually hypsodont upper molars and transverse sinus and mesosinus on M3 occulsal surface), P. parvulus and P. huaxiaensis are supposed to form a sister group. However, P. parvulus may be more derived than P. huaxiaensis as demonstrated by the more hypsodont molars and the deeper sinus in M3.