Research into arthropod evolution is hampered by the derived nature and rapid evolution of the best‐studied out‐group: the nematodes. We consider priapulids as an alternative out‐group. Priapulids are a small phylum of bottom‐dwelling marine worms; their tubular body with spiny proboscis or introvert has changed little over 520 million years and recognizable priapulids are common among exceptionally preserved Cambrian fossils. Using the complete mitochondrial genome and 42 nuclear genes from Priapulus caudatus, we show that priapulids are slowly evolving ecdysozoans; almost all these priapulid genes have evolved more slowly than nematode orthologs and the priapulid mitochondrial gene order may be unchanged since the Cambrian. Considering their primitive bodyplan and embryology and the great conservation of both nuclear and mitochondrial genomes, priapulids may deserve the popular epithet of “living fossil.” Their study is likely to yield significant new insights into the early evolution of the Ecdysozoa and the origins of the arthropods and their kin as well as aiding inference of the morphology of ancestral Ecdysozoa and Bilateria and their genomes.