Pyritized, elongate, conical conchs of “Allatheca” degeeri s.l. are common in dysoxic, dark gray mudstone intervals in the Early Cambrian (upper Terreneuvian–Series 2 boundary interval) Cuslett Formation at Keels, eastern Newfoundland. Wave-oriented, horizontal specimens are most abundant in this cool-water, high latitude, off-shore shelf facies of the Early Palaeozoic Avalon microcontinent. Based on conch morphology, shell microstructure, and the operculum, the species is an orthothecid hyolith. Comparison with the sizes of the early shells of planktic gastropods indicates a non-planktic life mode of “A.” degeeri s.l. hatchlings, although buoyancy calculations show that small juveniles with septate conchs to ca. 17\ mm long could have been nektic/planktic. If smaller “A.” degeeri s.l. individuals had a non-benthic mode of life, they and pseudoconodonts were the oldest skeletalized pelagic/nektic animals in the Cambrian Evolutionary Radiation. Most “A.” degeeri s.l. conchs at Keels are horizontally embedded and show a bimodal, wave-determined orientation, but about 10\% of the large conchs are vertically embedded with their aperture down. As larger shells were not neutrally buoyant, the vertical orientations of about 10\% of the conchs suggests an infaunal, likely detritivore, life mode suggestive of a scaphopod. Available morphologic and taphonomic evidence suggests that the vertically embedded conchs are in situ remains of dead benthic animals that colonized the bottom in better oxygenated intervals. Based on the current knowledge of Early Palaeozoic hyolith and cephalopod larval and adult morphologies, existing hypotheses of a planktic origin of cephalopods from hyolith ancestors are evaluated, and no evidence for such an evolutionary relationship is concluded to exist.