PREMISE OF THE STUDY: To enhance our knowledge of the diversity of microalgae, a phycological survey of the Canary Islands (Spain) was undertaken. Here we report the discovery of a (semi)terrestrial green filamentous alga isolated from a steep volcanic canyon on La Palma. This alga is continually exposed to changing weather conditions (floods vs. droughts) and thus provides a good opportunity to investigate possible adaptations to a semiterrestrial habitat with large fluctuations of environmental parameters.METHODS: We used axenic cultures, simulated flood and drought stresses and studied their effect on the life history of the alga using light, confocal laser scanning and scanning electron microscopy including fluorescent staining. Furthermore, phylogenetic analyses using rDNA sequence comparisons were performed.KEY RESULTS: Three specific life‐history traits that likely represent adaptations to the fluctuating environment of the canyon were observed: (1) fragmentation through “filament splitting”, a unique branching mechanism not reported before in algae and initiated by formation of oblique cross walls, (2) aplanospore formation, and (3) reproduction by multiflagellate zoospores with 4–24 flagella arranged in groups of four. Phylogenetic analyses identified the alga as Barranca multiflagellata gen. et sp. nov. (Barrancaceae fam. nov., Chaetophorales, Chlorophyceae). Moreover, the Chaetophoraceae Greville, 1824 was emended and a new family, Uronemataceae (fam. nov.) erected.CONCLUSIONS: The discovery of Barrancaceae fam. nov. highlights the importance of investigating nonconventional habitats to explore microalgal diversity. The reproductive versatility demonstrated by Barranca suggests adaptation to a semiterrestrial habitat with large fluctuations in water availability.