Tunicates are an evolutionarily significant subphylum of marine chordates, with their phylogenetic position as the sister-group to Vertebrata making them key to unraveling our own deep time origin. Tunicates greatly vary with regards to morphology, ecology, and life cycle, but little is known about the early evolution of the group, e.g. whether their last common ancestor lived freely in the water column or attached to the seafloor. Additionally, tunicates have a poor fossil record, which includes only one taxon with preserved soft-tissues. Here we describeMegasiphon thylakosnov., a 500-million-year-old tunicate from the Marjum Formation of Utah, which features a barrel-shaped body with two long siphons and prominent longitudinal muscles. The ascidiacean-like body of this new species suggests two alternative hypotheses for early tunicate evolution. The most likely scenario positsM. thylakosbelongs to stem-group Tunicata, suggesting that a biphasic life cycle, with a planktonic larva and a sessile epibenthic adult, is ancestral for this entire subphylum. Alternatively, a position within the crown-group indicates that the divergence between appendicularians and all other tunicates occurred 50 million years earlier than currently estimated based on molecular clocks. Ultimately,M. thylakosdemonstrates that fundamental components of the modern tunicate body plan were already established shortly after the Cambrian Explosion.