Banksia lepidorhiza is a prostrate shrub that typically grows to a width of 1.5 m (4 ft 11 in) with underground stems and a lignotuber. It has dull green, pinnatipartite leaves with between fifteen and twenty-five linear, sharply pointed lobes on each side. The flowers are arranged in heads of between twenty-five and thirty with narrow lance-shaped, involucral bracts 9–10 mm (0.35–0.39 in) long at the base of the head. The flowers have a deep pink perianth 32–34 mm (1.3–1.3 in) long and a cream-coloured and dull yellow pistil 31–33 mm (1.2–1.3 in) long. Flowering occurs from October to November and the follicles are broadly egg-shaped, 10–15 mm (0.39–0.59 in) long and glabrous.^[2][3][4]

This species was first formally described in 1996 by Alex George who gave it the name Dryandra lepidorhiza and published the description in the journal Nuytsia from a specimen he collected west of Woodanilling in 1986.^[4][5] The specific epithet (lepidorhiza) is from the ancient Greek words lepis (λεπίς), meaning 'scale', and rhiza (ῥίζα), meaning 'root', referring to the underground stems that are covered with scale-like bracts.^[4]

In 2007 Austin Mast and Kevin Thiele transferred all dryandras to the genus Banksia and renamed this species Banksia lepidorhiza.^[6][7]

Banksia lepidorhiza is only known from the type location where it grows in low kwongan in the Avon Wheatbelt biogeographic region.^[2][4]

This banksia is classified as "Priority One" by the Government of Western Australia Department of Parks and Wildlife,^[2] meaning that it is known from only one or a few locations which are potentially at risk.^[8]