A new genus and species of Draconematidae Filipjev, 1918, Megadraconema cornutum gen. nov., sp. nov., inhabiting subtidal sediments in Jejudo, Korea is described. Megadraconema cornutum gen. nov., sp. nov. is mainly characterized by a long body (1630–2220 µm), presence of a transverse circle of well-developed papillae-like cuticular protrusions at the base of the lip region, a head capsule with reticular structure of subcuticle, an amphid with a pore-like opening, and an internal, bar-shaped fovea. The diagnosis of the family Draconematidae is emended and a key to genus is provided based on their major differential diagnostic characteristics, summarized in a table. Phylogenetic relationships of all the genera within the Draconematidae are discussed for the first time, based on molecular analyses and morphological features. The phylogenetic position of the new genus and relationships within the family Draconematidae based on analysis of molecular sequence data are examined. Analysis of 18S rRNA gene sequences does not support the currently accepted classification, and indicates paraphyly of the subfamily Draconematinae.