From the early Cambrian of Yunnan, China, new chancellorid scleritomes assigned to Allonnia junyuani new species are described and compared with scleritomes of Chancelloria eros Walcott, 1920 from the Middle Cambrian of Utah, USA and isolated phosphatized chancellorid sclerites from the Georgina Basin of North Australia. Characters of the entirely preserved chancellorids offer new insight into the paleobiology of Chancelloridae. An irregular thickening at the inferred base of the narrow body end of Chancelloria eros from Utah is interpreted as a root bulb that anchored the sessile animal in the soft bottom sediment. Sclerites show gradual increase in size from the narrower towards the broader upper end of the chancellorid body. A central “gastral” lumen was not directly observed in any of the investigated specimens, but the orientation of sclerites towards the outer body surface indicates that the fossils are secondarily flattened due to compaction and were originally hollow. Taphonomy of isolated chancellorid sclerites from the Georgina Basin, Australia, indicates a biomineralization very different from that of sponge spicules, including the spongin spiculoids of demospongid Keratosa. Allonnia junyuani from Chengjiang (Yunnan) exhibits a prominent epidermis, probably with stable epithelian cell-to-cell connections. This feature excludes a sponge affiliation of the Chancelloridae and points towards a systematic position of this group within the epithelian-bearing animals and thus well above the Porifera.