Baguatherium jaureguii gen. et sp. nov. from the early Oligocene of northern Peru is the best known pre-Deseadan pyrothere. It has a relatively wider palate and less oblique lophs on the molariform teeth than Pyrotherium macfaddeni and Pyrotherium romeroi. A conspicuous lingual crest connects the anterior and posterior lophs of molariform teeth. Nares are retracted. Phylogenetic analysis places Baguatherium with Gryphodon and Pyrotherium in an unresolved polytomy. In Proticia and Colombitherium the wear facets of the molariform teeth indicate a mainly grinding masticatory apparatus. In Pyrotherium, Baguatherium, Gryphodon, and to a lesser degree, Propyrotherium, the oblique wear facets generate a cutting surface caused by a greater antero-posterior component to dorsoventral mastication. The cingulae function like stops or buttresses. Considering its brachydont condition, this specialization and the increase in the molariform surface in Baguatherium and Pyrotherium may have improved masticatory efficiency in response to the expansion of open environments during the Oligocene. © 2006 by the Society of Vertebrate Paleontology.