Since the identification of the Lower Cambrian Yunnanozoon as a chordate in 1995 (ref. 1), large numbers of complete specimens of soft-bodied chordates from the Lower Cambrian Maotianshan Shale in central Yunnan (southern China) have been recovered. Here we describe a recently discovered craniate-like chordate, Haikouella lanceolata, from 305 fossil specimens in Haikou near Kunming. This 530 million-year-old (Myr) fish-like animal resembles the contemporaneous Yunnanozoon from the Chengjiang fauna (about 35km southeast of Haikou) in several anatomic features. But Haikouella also has several additional anatomic features: a heart, ventral and dorsal aorta, an anterior branchial arterial, gill filaments, a caudal projection, a neural cord with a relatively large brain, a head with possible lateral eyes, and a ventrally situated buccal cavity with short tentacles. These findings indicate that Haikouella probably represents a very early craniate-like chordate that lived near the beginning of the Cambrian period during the main burst of the Cambrian explosion. These findings will add to the debate on the evolutionary transition from invertebrate to vertebrate.