Caviomorph rodents are endemic to South America and are one of the most adaptively diverse radiations of rodents today. Although their origin and diversification have been intensively studied, questions still remain about many of the details of where, when and how the group radiated. One area of continuing debate relates to the evolution of their neurosensory system. Modern caviomorphs exhibit a rich brain shape and size diversity. So far the oldest species for which endocranial data are known is dated to the Early Miocene. Here, we describe the virtual brain endocast of the late Oligocene stem chinchillid Incamys bolivianus from Bolivia and provide new hypotheses regarding the ancestral brain of Chinchillidae and Caviomorpha more broadly. Caviomorph rodents, independent from other rodent clades, acquired an expanded neocortex and their common ancestor was probably lissencephalic or had few sulci. Incamys uniquely combines extended neocortical temporal lobes and exposed caudal colliculi, which have roles in audition and vocalization processing. We interpret this morphology as evidence for enhanced auditory acuity, vocalization processing and potentially group‐living in Incamys, which is known in modern members of the Chinchillidae family. No temporal effect was found on relative brain size in South American mammals; however, our sample is limited to available brain endocasts and as such remains small and unevenly distributed taxonomically and temporally. Incamys provides crucial insight into the evolution of the caviomorph brain and shows that we still have much to explore regarding how these small mammals achieved one the most impressive adaptive radiations of the Cenozoic.