The researchers say the discovery also provides first-hand evidence of early evolution of the mammalian middle ear -- one of the most important features for modern mammals.
"This early mammalian ear from China is a Rosetta stone type of discovery which reinforces the idea that development of complex body parts can be explained by evolution, using exquisitely preserved fossils," said H. Richard Lane of the U.S. National Science Foundation, which funded the research.
Named Yanoconodon allini after the Yan Mountains in China's Hebei province, the fossil is the first Mesozoic Era mammal recovered from Hebei. The fossil site is about 190 miles from Beijing.
The researchers say the skull of Yanoconodon revealed a middle ear structure that is an intermediate step between those of modern mammals and those of near relatives of mammals, also known as mammaliaforms.
The discovery is reported in the current issue of the journal Nature.