The genus Lysmata Risso, 1816 includes five species in the Mediterranean Sea, namely two well-known species with an Atlantic–Mediterranean distribution, L. seticaudata (Risso, 1816) and L. nilita Dohrn & Holthuis, 1950, and three additional species only known from single records. These are L. kempi Chace, 1997 and L. vittata (Stimpson, 1860), alien species native to the Indo-Pacific region, and L. olavoi Fransen, 1991, a poorly known species originally described from the Azores (Atlantic Ocean) and only reported three decades ago from the eastern parts of the basin. Based on an integrative taxonomic approach, we report the first finding of an ovigerous female of L. olavoi from Italy (Gulf of Naples, Tyrrhenian Sea) and the entire western Mediterranean, thus confirming the presence of this species in the basin and filling a wide gap in its published distribution. It is possible that this taxon was present in the Mediterranean for centuries but went overlooked or undetected due to cryptic habits, occupancy of still unexplored habitats, or misidentification with the highly similar L. seticaudata. Results of phylogenetic analyses confirm the exclusion of L. olavoi by the major lysmatid groups and underline the necessity of multilocus approaches to disentangle its correct phylogenetic position. As the species is still surrounded by a number of unsolved ecological and phylogenetic questions, further field and laboratory work is required to shed light on them.