We report the discovery of a new genus and species of amber-preserved lizard from the mid-Cretaceous of Myanmar. The fossil is one of the smallest and most complete Cretaceous lizards ever found, preserving both the articulated skeleton and remains of the muscular system and other soft tissues. Despite its completeness, its state of preservation obscures important diagnostic features. We determined its taxonomic allocation using two approaches: we used previously identified autapomorphies of squamates that were observable in the fossil; and we included the fossil in a large squamate morphological data set. The apomorphy-based identification of this specimen, including comparative data on trunk elongation in squamates, suggests its allocation to the stem-group Anguimorpha. Results from the phylogenetic analysis places the fossil in one of four positions: as sister taxon of either Shinisaurus crocodilurus or Parasaniwa wyomingensis, at the root of Varanoidea, or in a polytomy with Varanoidea and a fossorial group retrieved in a previous assessment of squamate relationships. It is clear that this fossil has many similarities with anguimorph squamates and, if this taxonomic allocation is correct, this fossil would represent the first amber-preserved member of stem Anguimorpha ever recorded, and the smallest known member of that group. It further emphasizes the role of amber inclusions in expanding our understanding of the diversity of Cretaceous lizard communities.