We report a new genus and species of fossil lizard, Moqisaurus pulchrum gen. et sp. nov., from the Early Cretaceous Moqi Fauna of eastern Inner Mongolia, China. The new lizard differs from other Late Jurassic and Early Cretaceous taxa in the combination of an interdigitated frontoparietal suture, paired frontals and parietals, absence of angular process on mandible, and relatively short limbs. Phylogenetic analyses based on morphological characters placed Moqisaurus pulchrum at the base of Squamata when constrained by a molecular backbone. It most closely resembles Liushusaurus from the Jehol Biota, suggesting a possible relationship between those two biotas. The well-preserved pectoral girdle in the new lizard provides the earliest fossil record of a mesosternal fontanelle. Considering the recovered basal position of the new taxon, the presence of a mesosternal fontanelle implies that the fusion of the paired mesosternal rods occurred early in squamate evolution.