Psittacosauridae (parrot-beaked dinosaurs) represents the first major radiation of ceratopsians (horned dinosaurs). However, psittacosaurids are divergent from the general morphology found in other ceratopsians, and this has resulted in their uncertain systematic position among ceratopsians. Here we describe a new basal neoceratopsian dinosaur, Mosaiceratops azumai gen. et sp. nov. based on a partial semi-articulated skeleton recovered from the Upper Cretaceous Xiaguan Formation of Neixiang County, Henan Province, China. Although our phylogenetic analysis supports this taxon as the most basal neoceratopsian, Mosaiceratops exhibits many features previously considered unique to the Psittacosauridae among the basal Ceratopsia. These include a relatively highly positioned external naris, a proportionally large premaxilla, the nasal extending ventral to the external naris, slender postorbital and temporal bars, a large notch between the basal tubera, and the edentulous premaxilla. Thus, the discovery of Mosaiceratops reduces the morphological disparity between the Psittacosauridae and other basal ceratopsians. Character optimization suggests that basal neoceratopsians have re-evolved premaxillary teeth; a major reversal previously unknown in any dinosaur clade. The new specimen also highlights the mosaic nature of evolution among early ceratopsians and supports the phylogenetic hypothesis that the Psittacosauridae is a relatively derived clade, rather than the most basal group of the Ceratopsia.