Two known and one new species of Paraphanolaimus are described, viz. P. behningi from Germany, P. anisitsi from Paraguay and Germany and P. paraguayensis sp. n. from Paraguay. Paraphanolaimus paraguayensis sp. n. is characterised by 0.84-0.94 mm long body, presence of 37-44 lateral epidermal glands, strongly sclerotised and broad cylindrical stoma, swollen tail tip; female reproductive system with developed spermathecae, straight vagina; male without neck setae, 16-19 tubular supplements, two precloacal and nine to ten caudal setae, spicules 32-33 μm long, arcuate, with oval manubrium and fusiform shaft, platelike gubernaculum. Paraphanolaimus indicus and P.micoletzkyi are considered as species inquirendae. An emended diagnosis and a revised classification of Paraphanolaimus are proposed and a key to the species of the genus is provided. Aphanonchus bayensis (Keppner, 1988) comb. n. is proposed for Paraphanolaimus bayensis Keppner, 1988.