Cambrian annelids are strikingly diverse and reveal important details of annelid character acquisition. Their contribution, however, to a wider understanding of the evolution of the trochozoans (encompassing the annelids as well as such groups as the brachiopods and molluscs) remains limited. Thus the early annelids had been linked to a variety of cataphract Cambrian metazoans, notably Wiwaxia and the halkieriids, but recent work assigns such fossils to stem-group molluscs. Here we report two new annelids from the Lower Cambrian Chengjiang Lagerstätte, South China. Ipoliknus avitus n. gen., n. sp. is biramous with neurochaetae and notochaetae, but significantly also bears dorsal spinose sclerites and dorso-lateral dentate sclerites. Adelochaeta sinensis n. gen., n. sp. is unique amongst Cambrian polychaetes in possessing the rod-like supports of the parapodia known as aciculae. This supports phylogenetic placement of Adelochaeta as sister to some more derived aciculate Palaeozoic taxa, but in contrast Ipoliknus is recovered as the most basal of the stem-group annelids. Sclerites and chaetae of I. avitus are interpreted respectively as the remnants and derivatives of a once more extensive cataphract covering that was a characteristic of more primitive trochozoans. The two sets of chaetae (noto- and neurochaetae) and two sets of sclerites (spinose and dentate) suggest that in a pre-annelid an earlier and more complete scleritome may have consisted of four zones of sclerites. Other cataphract taxa from the Lower Palaeozoic show a variety of scleritome configurations but establishing direct links with such basal annelids as Ipoliknus at present must remain conjectural.