We describe a new diminutive early Eocene lizard, Blutwurstia oliviae, gen. et sp. nov., on the basis of associated cranial and postcranial remains from the Clarks Fork Basin of Wyoming. Results from phylogenetic analyses suggest that B. oliviae is on the stem of knob-scaled lizards (Xenosaurus), a relict extant clade of specialized, stenotopic crevice-dwellers from Mexico and Central America. Results further suggest that B. oliviae is basal to all other previously described pan-xenosaurs (members of Pan-Xenosaurus, the total clade of Xenosaurus) except species of Entomophontes, to which it is closely related. Given that B. oliviae and Entomophontes are known from a limited fossil record, with only one recovered element (the maxilla) in common, the level of support for this relationship is surprisingly high. We use a posteriori time-calibrated trees and ghost lineages (maximum parsimony) and divergence time estimates under the fossilized birth-death process (Bayesian inference) to infer patterns of extinction across the Cretaceous-Paleogene (K-Pg) boundary in Pan-Xenosaurus, including those consistent with pseudoextinction. Whereas the fossil record documents a single lineage in the latest Cretaceous, results from analyses using these analytical methods suggest that three or more species existed, with high survivorship across the K-Pg boundary. The surviving lineages were apparently present at proximal to intermediate distance from the Chicxulub impact site, thought to have a causal relationship with extinctions across the K-Pg boundary. The premaxilla and dorsal vertebrae of E. incrustatus and B. oliviae, respectively, independently suggest that each of these taxa had a depressed body form consistent with extant crevice-dwelling squamates, which may have played a role in the high survivorship of pan-xenosaur lineages across the K-Pg boundary.