A new fossil species, Luanpingia daohugouensis sp. nov., belonging to the family Sinoalidae is described from the Middle to Upper Jurassic Daohugou beds of Inner Mongolia, China, on the basis of two well-preserved complete specimens. The described species of Sinoalidae are reviewed and Jiania gracila is considered a junior synonym of Jiania crebra. The new discovery increases the palaeodiversity of sinoalids from the Daohugou beds. It also indicates stratigraphic correlation between the Daohugou beds, the Haifanggou Formation at Haifeng, Beipiao City, West Liaoning Province, and the Jiulongshan Formation at Zhouyingzi, Luanping County, Hebei Province. All of these units host the early assemblage' of the Yanliao biota.