Carex rainbowii (Cariceae, Cyperaceae), a new species from the Drakensberg mountains (KwaZulu-Natal province), is described and illustrated. It was found in the shady understory of the Afromontane forest in the Cathedral Peak area. An additional, nearby population was also identified based on previously collected herbarium material. Morphological and molecular (cpDNA 5′trnK intron and nrDNA ITS and ETS sequences) data were used to evaluate the taxonomic status of these populations and shed light on their systematic placement. Our data strongly support their taxonomic identity and inclusion in Carex sect. Sylvaticae. The new species can be readily distinguished from other related taxa mainly by the frequently androgynecandrous terminal spike, dense female spikes, hyaline glumes, as well as by some quantitative features. This finding implies a considerable biogeographic disjunction from the mainly Eurasian-North African range of the remaining species of sect. Sylvaticae, a pattern also found in the related sections Ceratocystis, Rhynchocystis and Spirostachyae. Comments are provided on previous misidentifications of C. rainbowii as the closely related Carex sylvatica. Data pertinent to the conservation status of the species are provided.