Altaethyrella tarimensis, a new species of rhynchonellide brachiopod, is described from the late Katian (Late Ordovician) Hadabulaktag Formation in the Kuruktag region of Xinjiang, Northwest China on the northeastern edge of the Tarim Basin. Serial sections of the shell clearly show no dorsal median septum or septalium in the dorsal valve, and no spiralia or atrypide-style crura. Like other species of the genus, A. tarimensis n. sp. exhibits a high degree of intraspecific variation, including variations in shell shape and size, number of ribs in the sulcus at the anterior, and degree of asymmetry. The discovery of Altaethyrella in Tarim has important paleogeographic implications, indicating a close relationship between the Late Ordovician brachiopod faunas of Tarim and those of the Kazakh terranes and North and South China paleoplates, supporting a recently published paleogeographic projection that places Tarim near the Chu-Ili terrane during the Late Ordovician. The abundant large biconvex shells of A. tarimensis n. sp. would have provided a firm substrate for encrusting filter feeders like bryozoans to establish on the Kuruktag Platform.