Aurealcaulis crossii gen. et sp. nov., is based on permineralized trunks of an osmundaceous tree fern from the Paleocene Fort Union Formation from near Bitter Creek Station of southwestern Wyoming. This new species is characterized by centripetal (exarch) development of its xylem strands which form part of the leaf traces. Most of the leaf traces depart the stele as two segments that fuse into a single C-shaped petiole vascular strand outside of the outer cortex. Stipular expansions of the petiole bases of this species lack sclerenchyma, and roots arise from the lateral edges of leaf traces in the inner cortex. The family Osmundaceae and subfamily Osmundoideae are slightly emended to accept genera assignable to this family and subfamily with exarch protoxylem in their steles. Foliage similar to Osmunda greenlandica (Heer) Brown, which is possibly the leaf form of A. crossii, occurred next to an axis of this species which was in growth position. This axis was anchored in a lignite suggesting that this species grew under swampy conditions. Aurealcaulis crossii is the first arborescent member of the Osmundaceae of Tertiary age and the second arborescent form in this family reported from the Northern Hemisphere.