We describe a new species in the caddisfly genus Rhyacophila (Trichoptera: Rhyacophilidae) from the southern Cumberland Plateau of the United States. Rhyacophila dandaganu n. sp. is placed in the Rhyacophila lobifera Group from North America, the second known species in this group. The new species is distinguished from Rhyacophila lobifera Betten, 1934 by the shape and dimensions of several genitalic structures, as well as the absence of parameres accompanying the endotheca and the characteristic shape of the tenth segment and phallicata. We discuss the geographic range of these two species and the questions raised by the curious (apparent) lack of sympatric populations. We discuss some testable hypotheses that might determine how populations of R. dandaganu n. sp. and R. lobifera could maintain phenotypic distinctiveness, in the absence of obvious geographic barriers to gene flow, including behavioral, chemical or tactile mating cues.