The taxonomy and phylogenetic interpretations of the 'small shelly fossil' group traditionally called pelagiellids has a long and convoluted history, and has subsequently been labelled the 'Pelagiella problem'. While there is general agreement that these fossils represent lophotrochozoans, Pelagiella and similar forms have often been regarded as members of various molluscan groups (especially helcionelloids or gastropods), as well as annelids. Recent description of paired bundles of chaetae-like structures in Pseudopelagiella exigua (formerly Pelagiella exigua) from the lower Cambrian Kinzers Formation in Pennsylvania, USA, has reignited the debate regarding the systematics of Pelagiella and comparable taxa. Here, we document a new example of exceptional preservation in 'Pelagiella' subangulata from the early Cambrian of the Flinders Ranges in South Australia, which is represented by bundles of elongate tubular structures positioned within the last whorl of two individual conchs. These three-dimensional structures have been phosphatized, with authigenic mineralization having taken place via nucleation on both the internal and external surfaces of the originally organic (presumably chitinous) tubes; this had resulted in two layers of calcium phosphate. Similar to both Orsten- and Doushantuo-type preservation, such phosphatization must have occurred relatively quickly before major post-mortem decay and disturbance, with the small conch providing an ideal microenvironment for this mode of fossilization. The elongate tubular structures in 'P.' subangulata are considered homologous to the chaetae-like structures seen in P. exigua, largely based on number, size, shape, and relative position within a turbiniform conch. Although this anatomical feature is somewhat comparable to annelid chaetae, the fine-scale morphological details of the distal terminations and surface microstructures required to support this interpretation are lacking in both taxa. Given that Pelagiella and other similar taxa exhibit an unusual mosaic of morphological features seen in molluscs and annelids, further taxonomic studies and additional discoveries of key anatomical structures are essential to resolve the systematics of this problematic, and potentially polyphyletic group.Stephanie A. Richter Stretton* [srichte2@myune.edu.au], Palaeoscience Research Centre, School of Environmental and Rural Science, University of New England, Armidale, New South Wales 2351, Australia; Sarah M. Jacquet [jacquets@missouri.edu], Department of Geological Sciences, University of Missouri, Columbia, MO 65211, USA; Glenn A. Brock [glenn.brock@mq.edu.au], School of Natural Sciences, Macquarie University, Sydney, New South Wales 2109, Australia; Zhiliang Zhang [zhiliang.zhang@nigpas.ac.cn], State Key Laboratory of Palaeobiology and Stratigraphy, Nanjing Institute of Geology and Palaeontology, Chinese Academy of Sciences, Nanjing 210008, China; John R. Paterson [jpater20@une.edu.au], Palaeoscience Research Centre, School of Environmental and Rural Science, University of New England, Armidale, New South Wales 2351, Australia; Marissa J. Betts [marissa.betts@une.edu.au], Palaeoscience Research Centre, School of Environmental and Rural Science, University of New England, Armidale, New South Wales 2351, Australia.