Abstract: An almost complete Ursavus skull in association with its mandible is described. The skull was recently found from upper part of Liushu Formation in Linxia Basin. Its stratigraphic level and geologic age are correlated to the late Bahean ALMA/S, ~8 Ma. It represents a new species, here named Ursavus tedfordi. Cladistic analysis is conducted using the TNT software, based on a matrix of 11 taxa and 37 characters. The tree 5 of the 8 most parsimonious trees is chosen as the most reliable to reflect the phylogenetic history of the ursid clade. As the tree 5 shows, after divergence from the Oligocene-Early Miocene hemicyonids (Cephalogale), the ursid clade first yielded two stem-taxa: Ballusia elmensis and B. orientalis, the latter of which being an aberrant branch. Then, two major subclades emerged: one comprising Kretzoiarctos, Agriarctos and Ailurarctos, the other containing all Ursavus species and their descendants including all living bears (excluding Ailuropoda). Kretzoiarctos may not be the direct ancestral form of the giant panda as Abella and colleagues (2012) suggested, but the ancestral form of the lineage of Indarctos(+Agriotherium ?). Among the numerous Ursavus species, U. tedfordiis the most advanced and closest related to the living bears (excludingAiluropoda) in morphology, however, might belong to a side-branch, judging by the autapomorphies possessed by it.