Found in southwestern China, it was described as a new species in 2017 by Zun-Tian Zhao and Lei Lü.

The type collection was made in Shangri-La county (in Yunnan Province), at an altitude of 3,500 metres (11,500 ft); here the lichen was found growing on pinecones.

Other characterics include the thin thallus, yellow to yellowish-brown apothecial disc, 12 to 16-spored ascus, and the pinecone substrate.

For example, characteristics that distinguish L. shangrilaensis from L. loekoesii include amphithecia with large crystals, darker-coloured apothecial discs, the presence of atranorin and absence of phenolic compounds.

[2] Another lookalike, L. polytropa, also has a thin thallus and yellowish apothecial discs, but unlike L. shangrilaensis, it has only eight spores per ascus.