The newly discovered species, Rugosodon eurasiaticus, is thought to be the oldest ancestor in the multituberculate family tree.
Despite living before the heyday of the dinosaurs, the creature already bore many of the features that made its descendants so successful.
The ancient creature, found in eastern China, had teeth adapted to eating both plants and animals, and highly rotatable ankle joints.
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When a 'mass extinction' event wiped out the dinosaurs some 65million years ago, the multituberculates survived.
How? They adapted to eating angiosperms - flowering plants.
The multituberculates evolved into a diverse group of animals ranging in size from that of a mouse to a beaver.
They only eventually vanished from the Earth about 34million years ago after losing out to other mammals such as primates, hoofed species and rodents.
Multituberculates were distributed across the world and more than 200 species are known, some as small as the tiniest of mice and the largest the size of beavers.
Some, such as Lambdopsalis from China, lived in burrows like prairie dogs while others, such as the North American Ptilodus, climbed trees as squirrels do today.
Dr Zhe-Xi Luo, from the University of Chicago, a member of the American and Chinese team who described the find in the journal Science, said: 'The later multituberculates are extremely functionally diverse.
'Some could jump, some could burrow, others could climb trees and many more lived on the ground.
'The tree-climbing multituberculates and the jumping multituberculates had the most interesting ankle bones, capable of "hyper-back-rotation" of the hind feet.
'What is surprising about this discovery is that these ankle features were already present in Rugosodon, a land-dwelling mammal.'
The fossil's teeth were very similar to those of Late Jurassic multituberculates from Portugal, Dr Luo added.
This suggested that the animals spread themselves across the whole of Eurasia.
Rugosodon measured about 6.5 inches, not including its tail, and would have been most active at night.
The location of the fossil bones suggests that the creature found by scientists lived on the shores of a lake.