Hyoliths (hyolithids and orthothecids) were one of the most successful early biomineralizing lophotrochozoans, and were a key component of the Cambrian evolutionary fauna. However, the morphology, skeletogenesis and anatomy of earliest members of this enigmatic clade, as well as its relationship with other lophotrochozoan phyla remain highly contentious. Here we present a new orthothecid, Longxiantheca mira gen. et sp. nov. preserved as part of the secondarily phosphatized Small Shelly Fossil assemblage from the lower Cambrian Xinji Formation of North China. Longxiantheca mira retains some ancestral traits of the clade with an undifferentiated disc-shaped operculum and a simple conical conch with a two-layered microstructure of aragonitic fibrous bundles. The operculum interior exhibits impressions of soft tissues, including muscle attachment scars, mantle epithelial cells and a central kidney-shaped platform in association with its feeding organ. Our study reveals that the muscular system and tentaculate feeding apparatus in orthothecids appear to be similar to that in hyolithids, suggesting a consistent anatomical configuration among the total group of hyoliths. The new finding of shell secreting cells demonstrates a mantle regulating mode of growth for the operculum. Taking all these data into considerations, especially on the basis of shell microstructures, we argue that hyoliths were an extinct sister group of molluscs.