Diprotodontians are the morphologically and ecologically most diverse order of marsupials. However, an approximately 30-million-year gap in the Australian terrestrial vertebrate fossil record means that the first half of diprotodontian evolution is unknown. Fossil taxa from immediately either side of this gap are therefore critical for reconstructing the early evolution of the order. Here we report the likely oldest-known koala relatives (Phascolarctidae), from the late Oligocene Pwerte Marnte Marnte Local Fauna (central Australia). These include coeval species of Madakoala and Nimiokoala, as well as a new probable koala (?Phascolarctidae). The new taxon, Lumakoala blackae gen. et sp. nov., was comparable in size to the smallest-known phascolarctids, with body-mass estimates of 2.2-2.6 kg. Its bunoselenodont upper molars retain the primitive metatherian condition of a continuous centrocrista, and distinct stylar cusps B and D which lacked occlusion with the hypoconid. This structural arrangement: (1) suggests a morphocline within Phascolarctidae from bunoselenodonty to selenodonty; and (2) better clarifies the evolutionary transitions between molar morphologies within Vombatomorphia. We hypothesize that the molar form of Lumakoala blackae approximates the ancestral condition of the suborder Vombatiformes. Furthermore, it provides a plausible link between diprotodontians and the putative polydolopimorphians Chulpasia jimthorselli and Thylacotinga bartholomaii from the early Eocene Tingamarra Local Fauna (eastern Australia), which we infer as having molar morphologies consistent with stem diprotodontians.Australia is renowned for the uniqueness of its biota, particularly its marsupials. This remarkable endemism is due mainly to their Gondwanan ancestry 1,2 , and long isolation following the continent's separation from Antarctica around 45 million years ago (mya) 3,4 . Much of the morphological and ecological diversity of Australian marsupials is manifested within the order Diprotodontia, which comprises two suborders of primarily herbivorous taxa-Vombatiformes (wombats, koalas and extinct relatives) and Phalangerida (possums and kangaroos)-as well as Thylacoleonidae (marsupial 'lions'; Diprotodontia incertae sedis 5 ) (Fig. 1). Molecular-clock analyses suggest that Diprotodontia diverged from Agreodontia (Dasyuromorphia + Peramelemorphia + Notoryctemorphia) sometime between the latest Cretaceous and the earliest middle Eocene 5-14 . This is important from a biogeographic standpoint because it implies that diprotodontians had diverged before the final separation of Australia and Antarctica. Yet, no definitive fossil diprotodontians from prior to the late Oligocene are known, with the possible exception of diprotodontian-like tarsals from the early or middle Eocene of southern Argentina 15 .Just two Australian fossil assemblages dating between 110 and 25 mya have yielded mammals 16,17 , leaving a massive gap spanning virtually the entire window of Australian marsupial origins 18,19 . In this window, taxon description...