Rare earth elements (REE) in marine minerals have been widely used as proxies for the redox status of depositional and/or diagenetic environments. Phosphate nodules, which are thought to grow within decimetres below the sediment–water interface and to be able to scavenge REE from the ambient pore water, are potential archives of subtle changes in REE compositions. Whether their REE signals represent specific redox conditions or they can be used to track the overlying water chemistry is worth exploring. Through in situ laser ablation – inductively coupled plasma – mass spectrometry (LA-ICP-MS), we investigate the REE compositions of a drill-core-preserved phosphate nodule from the lower Cambrian Niutitang Formation in the Daotuo area, northeastern Guizhou Province, South China. REE distributions of the nodule show concentric layers with systematic decreases in Ce anomalies (Ce/Ce*) from the core to the rim. The lowest Ce/Ce* appears in the outer rim where REE concentrations are relatively high. These results are interpreted to reflect REE exchange with pore water at a very early stage or bathymetric variation during apatite precipitation. The origin of the shale-normalized middle REE (MREE) enrichment in our sample is less constrained. Possible driving factors include preferential MREE substitution for Ca in the apatite lattice, degradation of organic matter and deposition beneath a ferruginous zone. Although speculative, the last possibility is consistent with the chemically stratified model for early Cambrian oceans, in which dynamic fluctuations of the chemocline provided an ideal depositional context for phosphogenesis.