Aims. On 28 February 2007 a new outburst of the previously known transient source XTE J1856+053 was detected with RXTE/ASM. We present here the results of an XMM-Newton (0.5-10.0 keV) Target of Opportunity observation performed on 14 March 2007, aimed at constraining the mass of the compact object in this X-ray binary and determining its main properties. Methods. The EPIC-pn camera was used in Timing mode and its spectrum fit together with the RGS data. IR observations with GROND at the 2.2 m telescope in La Silla provide further information on the system. Results. The X-ray light curve shows that both the 1996 and the 2007 outbursts had two peaks. The X-ray spectrum is well fit with a thermal accretion disk model, with kT(in) = 0.75(+/- 0.01) keV and foreground absorption N-H = 4.5(+/- 0.1) x 10(22) cm(-2). The low disk temperature favours a black-hole as accreting object, with an estimated mass in the range 1.3-4.2 M-circle dot. From the IR upper limits we argue that XTE J1856+053 is a low mass X-ray binary. We estimate the orbital period of the system to be between 3 and 12 h.