Yarala burchfieldi n. gen. and sp. is described from Oligo-Miocene deposits of Riversleigh Station, northwestern Queensland. Although the smallest and most plesiomorphic bandicoot known, it shares unique synapomorphies with other peramelemorphs, such as the posteriorly orientated preparacrista on M2, posterolingual location of the hypoconulids, and the buccal position of the centrocrista. However, Y. burchfieldi lacks synapomorphies that would unambiguously allow it to be placed in any of the modern families as currently understood. In its plesiomorphic features, Y. burchfieldi provides a structural link between peramelemorphs and dasyuromorphs and appears to be a descendant of an annectant group that separated long prior to the origin of “typical” bandicoots. This species is present in many sites within the Riversleigh area. It possibly filled an insectivorous-carnivorous niche presently occupied by small dasyurids that are relatively more abundant today than they were when the Riversleigh deposits accumulated.