The southern tip of Bjørnøya is composed of poorly known sedimentary rocks of Precambrian and Lower Palaeozoic age. Biostratigraphic and sedimentological investigations have demonstrated that the sediments of the Younger Dolomite are of Early, but not earliest, Ordovician age and that those of the conformably overlying Tetradium Limestone are of Black Riveran (Mid‐Ordovician) age. A significant hiatus lies between the base of the Younger Dolomite and the underlying Vendian glacial diamictites of the Sørhamna Formation. Comparison of this distinctive stratigraphic context with other sequences in Arctic Laurentia shows that a similar hiatus is present only in eastern North Greenland, where the Early Ordovician Wandel Valley Formation rests unconformably on a variety of Proterozoic units. Consideration of other geological characters, including the presence of west‐directed Caledonian thrusting and the location of the platform‐trough boundary in the Franklinian Basin, indicates that Bjørnøya was an integral part of the Franklinian Basin during Early Palaeozoic deposition and was attached to eastern North Greenland until early Tertiary rifting. A corollary of this interpretation of the Phanerozoic location of Bjørnøya indicates that any Caledonian strike‐slip, orogen‐parallel, displacements must have been located outboard of the combined Bjørnøya–Greenland craton. Furthermore, it provides strong constraints on interpretations of the geometry of Greenland Sea opening during early Tertiary time, and of the Vestbakken Volcanic Province and pull‐apart basin with its bounding faults, the Hornsund and Senja fracture zones.