Pywackia baileyi Landing in Landing et al., 2010, from the upper Cambrian Yudachica Member of Oaxaca State, southern Mexico, consists of small, phosphatic, proximally tapering cylindrical rods covered by shallow polygonal calices. The bryozoan-like morphology of this fossil prompted its interpretation as the first bryozoan known from the Cambrian. However, restudy of some of the original material, employing scanning electron microscopy for the first time, questions the assignment of Pywackia to the Bryozoa. Striking similarities between Pywackia and the modern pennatulacean octocoral Lituaria lead to an alternative hypothesis interpreting Pywackia an early fossil octocoral. While Pywackia is probably not a true pennatulacean, a group with a definitive fossil record stretching back only to the Late Cretaceous, it can be envisaged as having had a similar skeletal structure and ecology to Lituaria, the rods representing mineralized axes of tiny colonies that lived with their proximal ends buried in the sediment and distal ends covered by feeding polyps. Landing et al. (2010) considered the phosphatic composition of Pywackia specimens to be the result of diagenetic replacement, but the evidence is equivocal. If Pywackia had a primary phosphatic skeleton, this would support the hypothesized existence of phosphatic biomineralization early in the evolutionary history of Cnidaria, as well as providing further evidence that Pywackia is not a bryozoan.