The hexactinellid sponges Teganium and Teganiella are widespread in Ordovician, Devonian and Carboniferous strata in Laurentia, but have not previously been reported outside that palaeocontinent; some other members of the family Teganiidae are also restricted to Laurentia. The genus Teganiella in particular is considered to be a Laurentian endemic, with all species specialised for equatorial, shallow-water conditions. However, it is now clear that the diagnostic separation of Teganiella from Teganium was based on misunderstanding of the latter, and Teganiella should be considered a junior synonym. Based on this prior distribution, the discovery of two new species of Teganium (T. avalonensis sp. nov. and Teganium sp.) from the Middle Ordovician (Didymograptus murchisoni Biozone) of Castle Bank, Wales, is unexpected. These species are the oldest known and indicate diversification of the genus within a temperate microcontinent, prior to its appearance in Laurentia. The exceptional preservation of the new sponges also reveals detail of a complex body wall, supporting a more derived phylogenetic position within Hexactinellida (possibly affiliated to the Lyssacinosida) than previously recognised. The palaeobiogeography may suggest a relatively deep-water origin for the group (as for modern hexactinellids), which then became secondarily specialised for shallow-water environments within a Laurentian diversification.