Dryolestoids are an extinct mammalian group belonging to the lineage leading to modern marsupials and placentals. Dryolestoids are known by teeth and jaws from the Jurassic period of North America and Europe, but they thrived in South America up to the end of the Mesozoic era and survived to the beginnings of the Cenozoic. Isolated teeth and jaws from the latest Cretaceous of South America provide mounting evidence that, at least in western Gondwana, dryolestoids developed into strongly endemic groups by the Late Cretaceous. However, the lack of pre-Late Cretaceous dryolestoid remains made study of their origin and early diversification intractable. Here we describe the first mammalian remains from the early Late Cretaceous of South America, including two partial skulls and jaws of a derived dryolestoid showing dental and cranial features unknown among any other group of Mesozoic mammals, such as single-rooted molars preceded by double-rooted premolars, combined with a very long muzzle, exceedingly long canines and evidence of highly specialized masticatory musculature. On one hand, the new mammal shares derived features of dryolestoids with forms from the Jurassic of Laurasia, whereas on the other hand, it is very specialized and highlights the endemic, diverse dryolestoid fauna from the Cretaceous of South America. Our specimens include only the second mammalian skull known for the Cretaceous of Gondwana, bridging a previous 60-million-year gap in the fossil record, and document the whole cranial morphology of a dryolestoid, revealing an unsuspected morphological and ecological diversity for non-tribosphenic mammals.