Many relatives of Psarolepis have been found with other groups of fishes and palaeontologists are not certain in which taxonomic group it belongs.
Fossils have been found from the Late Silurian period (Pridoli) to Early Devonian (Lochkovian) in South China of Qujing, Yunnan.
The major characteristic of Psarolepis is the pair of parasymphysical tooth whorls, teeth which extend up at the front of the lower jaw. The head was made of several thick dermal plates and covered with deep pock-marks and large pores. Another trait is a large pectoral spine, just in front of the pectoral fin, extending back from the shoulder girdle, and a dorsal spine located in front of a median fin behind the head, which gives the fish a shark-like form.
In 1998, a 400-million-year-old fossil from the Silurian and Devonian period was discovered by Zhu and colleagues at the location of Yunnan in South China. This new find was the strange fossil fish Psarolepis.
Most of the Psarolepis specimens were found at the same locality of the Yulongsi Formation (Pridoli), the Xishancun Formation (early Lochkovian) and the Xitun Formation (late Lochkovian).
When Psarolepis was described for the first time, it was assigned to the group of lobe-finned fishes, the sarcopterygians. Palaeontologists were unable to locate Psarolepis in the cladogram with certainty, because they did not know if it was the most primitive lobed-finned fish or the most primitive bony fish.
Because Psarolepis lacks, and at the same time shares, some characteristics of both lobed-finned fish and ray-finned fish, it is considered to be the missing link between the two groups.