Shougangia bella from the Late Devonian (Famennian) of South China is a fern-like plant known for its morphology and now provided with anatomy and a reconstruction. Its stems contain a dissected stele with a four-ribbed and an elongate-curved primary xylem segments changing to three elongate and slightly curved segments. Primary branches have a dissected stele with three similar primary xylem segments as in stems. The primary xylem of the stems and primary branches is mesarch, and individual primary xylem segments bear peripheral protoxylem strands and are surrounded by secondary xylem. Shougangia is anatomically compared with fern-like plants, zygopterid ferns and early seed plants, verifying its uncertain affinity at class and order levels as suggested by morphology, or representing a new order within the Cladoxylopsida. On the basis of anatomy and branching pattern, it is emphasized that most fern-like plants appear evolutionarily closely related to iridopteridaleans. Secondary xylem is involved not only in mechanical support, but also more likely in enhancing water supply for fern-like plants including Shougangia. By the Late Devonian, besides the abrupt drop of atmospheric CO2 levels, the presence of secondary xylem may correlate well with the primary radiation of leaves (megaphylls) of euphyllophytes (e.g. fern-like plants, sphenopsids, progymnosperms and seed plants).