Houdinia flexilissima, gen. nov., sp. nov. is described from peatlands in the North Island of New Zealand. The extremely narrow larvae mine and pupate in the living stems of Sporadanthus ferrugineus de Lange, Heenan & Clarkson, (Restionaceae), a large endemic rush. Eggs, larvae, pupae and adults are fully described and illustrated. The systematic placement of this autapomorphic taxon is discussed in detail, and it is assigned within Gelechioidea to Batrachedridae on the basis of characters shared with a taxon currently placed in Batrachedra. Because of its morphological distinctiveness, as well as threats to the habitat of its very local host plant, H. flexilissima, gen. nov., sp. nov. is considered a species of high conservation status.