The early evolution of the major groups of derived non-avialan theropods is still not well understood, mainly because of their poor fossil record in the Jurassic. A well-known result of this problem is the 'temporal paradox' argument that is sometimes made against the theropod hypothesis of avian origins. Here we report on an exceptionally well-preserved small theropod specimen collected from the earliest Late Jurassic Tiaojishan Formation of western Liaoning, China. The specimen is referable to the Troodontidae, which are among the theropods most closely related to birds. This new find refutes the 'temporal paradox'1 and provides significant information on the temporal framework of theropod divergence. Furthermore, the extensive feathering of this specimen, particularly the attachment of long pennaceous feathers to the pes, sheds new light on the early evolution of feathers and demonstrates the complex distribution of skeletal and integumentary features close to the dinosaur-bird transition.