Cavenderichthys talbragarensis (Woodward, 1895) is a common signature freshwater stem teleost in the Upper Jurassic of Australia. Our discovery of numerous otoliths in the Talbragar Fish Bed establishes Cavenderichthys as only the second known Jurassic teleost and the third known stem teleost with otoliths in situ and provides an important calibration point for the interpretation of isolated Mesozoic otoliths. It corroborates the low degree of morphological diversification of stem teleost otoliths. The abundance of otoliths (isolated, in coprolites and in situ) allows the mapping of ontogenetic effects and of intraspecific variability for the first time in attributable stem teleost otoliths. Here, we describe 284 otoliths, mostly from Cavenderichthys. Otoliths in situ in Cavenderichthys document the presence of sagitta, lapillus, and asteriscus. Three other, much rarer otolith types were also found that have a teleost otolith pattern more primitive than that of Leptolepidiformes; the origin of these is unknown, but it is likely that they stem from pholidophoriform fishes of the family Archaeomenidae. If confirmed, this otolith pattern would provide a further highly diagnostic and synapomorphic character to define teleosts at the level of the Leptolepidiformes and above. Different mineral replacement processes in fossils from the Talbragar Fish Bed aided us in finding many otoliths, particularly otoliths in situ. Given their abundance and distinct preservation, it is surprising that otoliths in the Talbragar Fish Bed have not been recognized before.