The Middle Triassic was a time of major changes in tetrapod faunas worldwide, but the fossil record for this interval is largely obscure for terrestrial faunas. This poses a severe limitation to our understanding on the earliest stages of diversification of lineages representing some of the most diverse faunas in the world today, such as lepidosauromorphs (e.g., lizards and tuataras). Here, we report a tiny new lepidosauromorph from the Middle Triassic from Vellberg (Germany), which combines a mosaic of features from both early evolving squamates and rhynchocephalians, such as the simultaneous occurrence of a splenial bone and partial development of acrodonty. Phylogenetic analyses applying different optimality criteria, and combined morphological and molecular data, consistently recover the new taxon as a stem-lepidosauromorph, implying stem-lepidosauromorph species coinhabited areas comprising today's central Europe at the same time as the earliest known rhynchocephalians and squamates. It further demonstrates a more complex evolutionary scenario for dental evolution in early lepidosauromorphs, with independent acquisitions of acrodonty early in their evolutionary history. The small size of most terrestrial vertebrates from Vellberg is conspicuous, contrasting to younger Triassic deposits worldwide, but comparable to Early Triassic faunas, suggesting a potential long-lasting Lilliput effect in this fauna.