Brachiopod shell accumulations are abundant and diverse in the lower Cambrian strata of Yunnan Province, South China, but most commonly they are composed of linguloid and acrotheloid brachiopods. Here, we describe the first record of shell beds with high-density accumulations of microscopic acrotretoid brachiopods (usually <2 mm in width) in the muddy deposits of the Wulongqing Formation (Guanshan Biota, Cambrian Stage 4) in the Wuding area of Yunnan Province. The acrotretoid shell beds from the Wulongqing Formation vary from thin mm-thick pavements to more well-developed beds, several centimeters thick. The occurrence of remarkably rich acrotretoid shell beds indicates that microscopic lingulates began to exert an important role in hardening and paving the soft-substrate seafloor during the early Cambrian evolution of Phanerozoic “mixgrounds.” The new Guanshan material is referred to a new species, Linnarssonia sapushanensis n. sp., which differs from other species of Linnarssonia mainly in having a well-developed internal pedicle tube, as well as a relatively longer dorsal median septum. The occurrence of Linnarssonia sapushanensis n. sp. in the Wulongqing Formation in eastern Yunnan extend the oldest record of the genus on the Yangtze Platform of South China back to at least Cambrian Stage 4.