The partial skeleton of a small reptile, from the Middle Permian Tapinocephalus Assemblage Zone of South Africa, is described as a new parareptile. Australothyris smithi gen. et sp. nov. is diagnosed by contact between the postfrontal and the supratemporal, a relatively large pineal foramen, a small interpterygoid vacuity, the presence of teeth on the ventral surfaces of the basipterygoid processes, and several other autapomorphies. Phylogenetic analysis of an augmented data matrix from the literature positions A. smithi basally within Parareptilia, as the sister taxon of Ankyramorpha. Our results indicate that the presence of a lateral temporal fenestra is synapomorphic for procolophonomorphs (as regarded in this paper) and that this structure was variously modified in procolophonians. Australothyris smithi is the phylogenetically youngest member of a grade of Gondwanan parareptiles that includes mesosaurids and millerosaurs, a topology intimating that parareptiles diversified first in Gondwana and then dispersed into Laurasia. This biogeographic scenario is at odds with observations that the bolosaurids of Laurasia predate mesosaurids and other Gondwanan parareptiles by approximately 15 million years.