Palaeospondylus may be a new lineage of jawed vertebrates.

Palaeospondylus fossils are linked to hagfish, ostracoderms, jawed vertebrates, and tetrapods, reflecting uncertain phylogenetic placement. Recent studies on P. gunni and P. australis suggest phylogenetic relationships with Tetrapodomorpha and Chondrichthyes, respectively. Jawed vertebrates are characterized by three semicircular canals , with two in cyclostomes. Palaeospondylus exhibits three canals , aligning it more closely with jawed vertebrates. Only one otoconia (sacculus) has found in P. australis , whereas jawed vertebrates typically have at least two (utricle and saccule), while cyclostomes have only one otoconia. Osteichthyes have at least six sensory epithelia, while Cyclostomes have 3-4 sensory epithelia. P. australis appears to have around four sensory epithelia, which is intermediate and unique among jawed vertebrates, potentially representing a basal condition.