Enigmas overturned by Chinese fossils.

With the help of a new fossil discovered in China, paleontologists are starting to make sense out of some of the most problematic and bizarre animals known in Earth's history. Several of these strangers from 530 million years ago -- previously viewed as failed evolutionary experiments, with no counterparts in the modern world -- now appeear to fit into an existing animal phylum.

The newly found caterpillar-like animal is among the latest prizes to emerge from an extraordinary set of fossil beds in the Chengjiang area of southwestern China. The dozens of species discovered so far within these rich formations are painting a picture of life in the early Cambrian period, which began just after the evolutionary "big bang" that gave birth to almost all the major groups of modern multicellular animals.

For decades, paleontologists have labored to understand the Cambrian's odd-ball creatures, which don't fit readily into existing animal phyla. Using the new, as-yet-unnamed Chinese fossil as a guidepost, two researchers now suggest that some of the most enigmatic of these animals belong to the phylum Onychophora, which in the modern world includes the velvet worms of the tropics. Lars Ramskold of the Swedish Museum of Natural History in Stockholm and Hou Xian-guang of the Nanjing Institute of Geology and Paleontology in China describe their findings and conclusions in the May 16 NATURE.

The newly discovered animal "makes the Cambrian bestiary look a lot less bizarre than it used to," says Stefan Bengtson, a specialist in Cambrian fossils at Uppsala University in Sweden.

The keystone fossil has a segmented body stretching 5 to 6 centimeters in length, with 11 pairs of ballonish legs that end in two-pronged claws. Onychophorans share these same features, leading Ramskold and Hou to group the new fossil with the existing phylum. In the modern world, onychophorans live on land, mainly in the moist litter of tropical forests. Bengtson describes them as looking like a cross between a centipede and the Michelin Man.

To make the onychophoran connection, Ramskold and Hou have stretched the boundaries of the phylum. The Cambrian animal, unlike the modern forms, lived in the ocean and sported 10 sets of rigid back plates, each topped by a pointy spine.

The two researchers have used the new fossil as a stepping stone to categorize some of the most puzzling Cambrian fossils found in Canada's Burgess Shale formation and other sites around the world. One of the weirdest, appropriately named Hallucigenia, looks like something out of a Dr. Seuss book. Previous restorations have depicted this inch-long animal walking on seven pairs of spiky legs, with a row of seven tentacles sprouting from its back -- a beast so bizarre that it defies categorization.

But Ramskold and Hou think the standard reconstruction of Hallucigenia has got the animal turned upside down. They suggest that the tentacles are actually legs, and the spikes stick up from the back of the creature, like longer versions of the spines seen on the new Chinese fossil. The connection between Hallucigenia and the unnamed Chengjiang animal has led the two researchers to draw Hallucigenia, as well as some other Cambrian oddities, into the fold of Onychophora.

Although this work has attracted the attention of other Cambrian experts, most paleontologists remain unconvinced by Ramskold and Hou's interpretation of Hallucigenia. Their biggest hurdle is a missing set of legs. Only two good Hallucigenia fossils have been found so far, and each shows only one row of the "tentacles" that Ramskold and Hou have labeled legs. The two researchers believe another set lies buried beneath the visible legs.

"I think they're probably right. It may well be that the animal is the other way up," says paleontologist Simon Conway Morris of the University of Cambridge in England. If so, the reversal will overturn Conway Morris' own interpretation of Hallucigenia, which he proposed in the late 1970s.

This week, Conway Morris and Ramskold visited the Smithsonian Institution in Washington, D.C., and examined the two Hallucigenia specimens housed there, in hopes of resolving the issue.