Seabob shrimps of the genus Xiphopenaeus are important fishery resources along the Atlantic and Pacific coasts of Central and South America. The genus was considered to comprise two species: the Atlantic Xiphopenaeus kroyeri (Heller, Sitzungsber Math Naturwiss cl kaiserliche Akad Wiss Wien 45:389–426, 1862), and the Pacific Xiphopenaeus riveti (Bouvier, Bull Mus Hist Nat Paris 13:113–116, 1907). In a recent review, Xiphopenaeus was regarded as a monotypic genus, on the basis that no clear morphological differences could be found between Pacific and Atlantic specimens (Pe´rez Farfante and Kensley, Mem Mus Nat Hist Nat Paris 175:1–79, 1997). In the present work, nuclear (allozymes), and mitochondrial (Cytochrome Oxidase I) genes were used to demonstrate the validity of X. riveti and reveal the presence of two cryptic species of Xiphopenaeus within X. kroyeri in the Atlantic Ocean. The high levels of molecular divergence among these species contrast with their high morphological resemblance. Interspecific sequence divergences (Kimura 2-parameter distance) varied from 0.106 to 0.151, whereas intraspecific distances ranged from 0 to 0.008 in Xiphopenaeus sp. 1, from 0 to 0.003 in Xiphopenaeus sp. 2, and from 0.002 to 0.005 in X. riveti. In addition, five diagnostic allozyme loci were found between sympatric samples of Xiphopenaeus sp. 1 and 2 along the Brazilian coast. The results suggest that Xiphopenaeus sp. 2 from the Atlantic is more closely related to the Pacific X. riveti than to the Atlantic Xiphopenaeus sp. 1. Furthermore, a high level of genetic structuring (Xiphopenaeus sp. 1: FST=0.026; P<0.05; Xiphopenaeus sp. 2: FST=0.055; P<0.01) was found in the Brazilian Xiphopenaeus populations, indicating the presence of different genetic stocks in both Atlantic species. These findings have important commercial implications as they show that the fisheries of the two Atlantic species must be managed separately, and that each one is comprised of different populations.