THE Chengjiang fossil Lagerstatte is one of the earliest and most important palaeontological sites from the Phanerozoic era(1,2) about 530 million years ago(3). It yields extremely abundant and remarkably preserved soft-bodied fossils and shells with soft parts of various kinds, including bradoriids(4-6), trilobites(7,8), crustaceans(9), brachiopods, worms, sponges, algae and many unknown forms(10-13). One of these fossils is Yunnanozoon(14), which we reinterpret here as the earliest known hemichordate. Possessing half of the characteristic chordate features and providing an anatomical link between invertebrates and chordates(15), Hemichordata is a minor but important phylum in evolutionary biology. Hemichordates comprise two main groups : the enteropneusts, or ’acorn worms’, and the pterobranchs. Apart from the presumable inclusion of graptolites in pterobranchs(16-19), there are very few hemichordate fossils(2,17,20). Although Yunnanozoon is superficially similar to the chordates(21), its typical tripartite body plan is broadly consistent with that of living balanoglossid hemichordates (enteropneusts).