Biramous appendages are a common feature among modern marine arthropods that evolved deep in arthropod phylogeny. The branched appendage of Cambrian arthropods has long been considered as the ancient biramous limb, sparking numerous investigations on its origin and evolution. Here, we report a new arthropod,Erratus speraregen. et sp. nov., from the Lower Cambrian (Stage 3, 520 Ma) Chengjiang biota of Yunnan, China, with unique trunk appendages formed of lateral anomalocaridid-type flaps and ventral subconical endopods. These appendages represent an intermediate stage of biramous limb evolution, i.e. from ‘two pairs of flap appendages' in radiodonts to ‘flap + endopod’ inErratus, to ‘exopod + endopod’ in the rest of carapace-bearing arthropods that populate the basal region of the upper-stem lineage arthropods (deuteropods). The new species occupies a phylogenetic position at the first node closer to deuteropods than to radiodonts, and therefore pinpoints the earliest occurrence of the endopod within Deuteropoda. The primitive endopod is weakly sclerotized, and has unspecialized segments without endites or claw. The findings might support previous claims that the outer branch of the biramous limb of fossil marine arthropods, such as trilobites, is not a true exopod, but is instead a modified exite.This article is part of the theme issue ‘The impact of Chinese palaeontology on evolutionary research’.