Ernanodon, one of the most enigmatic Asian fossil mammals, was previously known by a single specimen from the late Paleocene (Nongshanian) of China. Here we document the first record of Ernanodon from Mongolia, represented by a nearly complete skeleton from the late Paleocene (Gashatan) of the Naran Bulak locality. The new material provides an opportunity to understand the lifestyle and habits of this rare mammal and reevaluate the arguments used to establish the phylogenetic relationships of Ernanodon. Functional analysis indicates that Ernanodon had very strong forelimbs with large claws and used its forelimbs for scratch-digging. Character analysis reveals numerous similarities in postcranial anatomy between Ernanodon and Palaeanodonta. Phylogenetic analysis supports inclusion of Ernanodon in the order Palaeanodonta and suggests that Palaeanodonta and Pholidota are sister groups.