Chelicerates are a diverse group of terrestrial and aquatic arthropods, yet their origin and early evolution remain debated1–6. Among different hypotheses7–11, one proposes that the front appendages, known as chelicerae, of chelicerates evolved from the short great appendages (SGAs) of Cambrian megacheirans12–16 and that book gills originated from their trunk limbs7. Although taxa such as Mollisonia plenovenatrix7 and Megachelicerax cousteaui16 provide important clues to the early evolution of chelicerates, the morphological transition from megacheiran-like appendages to true chelicerae and book gills remains unresolved. Here we use X-ray microtomography to reveal the three-dimensional anatomy of Urokodia aequalis, an early Cambrian euarthropod from the Chengjiang biota of China. Urokodia has a seven-segmented head with a sclerotized hypostome, pincer-like SGAs and biramous trunk appendages with overlapping exite flaps. Its pincer-like SGAs represent a bridge structure between the appearance of multisegmented SGAs and true chelicerae, and its trunk appendages support a megacheiran origin of book gills. Phylogenetic analyses consistently confirm the monophyly of Cheliceromorpha17, with Urokodia being the earliest-branching upper stem-group chelicerate that links lower stem-group megacheirans to crownward forms such as Mollisonia and Megachelicerax.