THE earliest evolution of the chordates and their relationships with other deuterostomes remains controversial1-3. Rejuvenation of interest in the areas of molecular phylogeny4 and developmental genetics5-7 has not been matched by new insights from the fossil record, which for the Lower and Middle Cambrian remains exceptionally sparse. The supposed chordate Emmonsaspis8 has been shown to be a frond-like fossil9, and phosphatic sclerites of hadimopanellids, once compared with vertebrate dermal armour10,11, are now known to be derived from the cuticle of protostome palaeoscolecidan worms12,13. Other fragmentary material of supposed scales is even more dubious14. The best-known candidate in this thin roster remains the Burgess Shale chordate Pikaia15. Here we report a single specimen of a Lower Cambrian chordate, Cathaymyrus diadexus, new genus and species, that is similar to Pikaia but predates it by about 10 million years (Myr). Important features of this new specimen are structures interpreted as pharyngeal gill slits. The evolution of chordates was an integral part of the first stages of the Cambrian 'explosion', and steps to craniates with neural crest were probably achieved by the Middle Cambrian.