The basal Cambrian Kuanchuanpu Formation (southern Shaanxi, China) yields well‐preserved specimens of the medusozoan genus Olivooides, a thecate polyp with pentaradial symmetry. Described herein is a rare internal thecal (peridermal) structure, termed the ‘transverse disc‐shaped diaphragm’ (TDD), which consists of a thin, adapically convex transverse wall spanning the peridermal cavity in certain specimens of O. mirabilis and O. multisulcatus. The TDD may be a diagnostic feature distinguishing Olivooides from other genera in the family Olivooidae, but it may also have been adventitious and thus similar in origin to the schott (apical wall) of conulariids, Sphenothallus and coronate scyphopolyps. If primary in nature, the TDD may have served to increase the stability and/or feeding efficiency of the polyp within the periderm, and it may have provided additional compressional strength to the periderm. The TDD is the earliest known transverse exoskeletal element in cnidarians, although similar transverse structures in tabulate corals, conulariids, Sphenothallus, coronate scyphopolyps and Archotuba conoidalis may have arisen independently in these lineages.