Summary Key sources of information on the nature of early terrestrial ecosystems are the fossilized remains of plants and associated organic encrustations, which are interpreted as either biofilms, biological soil crusts or lichens. The hypothesis that some of these encrustations might be the remains of the thalloid gametophytes of embryophytes provided the stimulus for this investigation. Fossils preserved in charcoal were extracted from Devonian Period (Lochkovian Stage, c. 410–419 Myr old) sediments at a geological site in Shropshire (UK). Scanning electron micrographs (SEMs) of the fossils were compared with new and published SEMs of extant bryophytes and tracheophytes, respectively. One specimen was further prepared and imaged by transmission electron microscopy. Fossils of thalloid morphology were composed almost entirely of cells with labyrinthine ingrowths; these also were present in fossils of axial morphology where they were associated with putative food‐conducting cells. Comparison with modern embryophytes demonstrates that these distinctive cells are transfer cells (TCs). Our fossils provide by far the earliest geological evidence of TCs. They also show that some organic encrustations are the remains of thalloid land plants and that these are possibly part of the life cycle of a newly recognized group of plants called the eophytes.