The northwestern Pacific species of the crangonid genus Paracrangon Dana, 1852 are reviewed. Five species, including one new species, are recognised from the region: P. echinata Dana, 1852 (type species of the genus), P. abei Kubo, 1937, P. furcata Kubo, 1937, P. okutanii Ohé and Takeda, 1986, and P. ostlingos sp. nov. The geographical range of P. okutanii is extended to the northern South China Sea off southwestern Taiwan, representing the first discovery of species of the genus from tropical waters in the western Pacific. These species are diagnosed and illustrated. They are classified into two informal species groups, the P. echinata species group (including P. echinata, P. abei and P. okutanii, and two species from other regions, P. areolata Faxon, 1893 and P. australis Hanamura, Wadley and Taylor, 1999) and the P. furcata species group (P. furcata and P. ostlingos sp. nov.). New findings on the morphology of the genus are presented. The monophyly of Paracrangon is highly corroborated by a number of autapomorphic characters, but its relationship to other crangonid genera remains obscure. A revised key to aid in the identification of the species of Paracrangon is presented.