An isolated upper molar represents Litokoala thurmerae sp. nov., the eighth species of phascolarctid marsupial (koalas) from the South Australian mid-Tertiary sequence, and the fourth from the late Oligocene Etadunna Formation at Lake Palankarinna. It is the smallest and oldest species, differing from L. kutjamarpensis (Stirton et al. 1967), L. kanunkaensis (Springer 1987) and L. dicktedfordi, sp. nov. (the Riversleigh specimens referred to L. kanunkaensis and L. kutjamarpensis (Black and Archer 1997; Louys et al. 2007) but described here as a new species) in size, and the almost total lack of crenulations on the surfaces of the cusps. This brings to at least five the number of probably arboreal mammal species in the Ngama Local Fauna (Pledge 1984) of Mammalon Hill, Lake Palankarinna – the others being Ektopodon stirtoni (Pledge 1986), Pildra magnus (Pledge 1987a), P. sp. cf. kutjamarpensis (ibid.), and Burramys wakefieldi (Pledge 1987b) – and further supports the riparian forest environment interpretation proposed for this part of the Etadunna sequence (Pledge 1984; Martin 2006).