Motivated by the recent experimental measurements, we have investigated the Cabibbo-favored process Λc+→pK¯0η, where the N(1535) resonance is dynamically generated from the S-wave pseudoscalar meson-octet baryon interactions within the chiral unitary approach. The contributions from the intermediate N(1650) and the predicted low-lying baryon Σ*(1/2−) are also considered. In addition, a Breit-Wigner amplitude for the N(1535) resonance is checked. By comparing with the measured ηp, K¯0η, and pK¯0 invariant mass squared distributions, our results support the interpretation of N(1535) as a dynamically generated state. Furthermore, we demonstrate that, with the contribution from Σ*(1/2−) taken into account, the calculated invariant mass distributions agree with the Belle measurements. Future precise measurements of the Λc+→pK¯0η process can further elucidate the existence of the low-lying baryon Σ*(1/2−). Published by the American Physical Society 2024