Borrelia burgdorferi sensu lato (s.l.), transmitted by Ixodes spp. ticks, is the causative agent of Lyme disease. Although Ixodes spp. ticks are distributed in both Northern and Southern Hemispheres, evidence for the presence of B. burgdorferi s.l. in South America apart from Uruguay is lacking. We now report the presence of culturable spirochetes with flat-wave morphology and borrelial DNA in endemic Ixodes stilesi ticks collected in Chile from environmental vegetation and long-tailed rice rats (Oligoryzomys longicaudatus). Cultured spirochetes and borrelial DNA in ticks were characterized by multilocus sequence typing and by sequencing five other loci (16S and 23S ribosomal genes, 5S–23S intergenic spacer, flaB, ospC). Phylogenetic analysis placed this spirochete as a new genospecies within the Lyme borreliosis group. Its plasmid profile determined by polymerase chain reaction and pulsed-field gel electrophoresis differed from that of B. burgdorferi B31A3. We propose naming this new South American member of the Lyme borreliosis group B. chilensis VA1 in honor of its country of origin.