Toothed mysticetes of the family Aetiocetidae from Oligocene rocks of the North Pacific play a key role in interpretations of cetacean evolution because they are transitional in grade between dorudontine archaeocetes and edentulous mysticetes. The holotype skull of Aetiocetus weltoni from the late Oligocene (28–24 Ma) of Oregon, USA, has been further prepared, revealing additional morphological features of the basicranium, rostrum and dentary that have important implications for mysticete evolution and functional anatomy. The palate of Aetiocetus weltoni preserves diminutive lateral palatal foramina and associated delicate sulci which appear to be homologous with the prominent palatal foramina and sulci that occur along the lateral portion of the palate in extant mysticetes. In modern baleen whales these foramina allow passage of branches of the superior alveolar artery, which supplies blood to the epithelia of the developing baleen racks. As homologous structures, the lateral palatal foramina of A. weltoni suggest that baleen was present in this Oligocene toothed mysticete. Cladistic analysis of 46 cranial and dental characters supports monophyly of the Aetiocetidae, with toothed mysticetes Janjucetus and Mammalodon positioned as successive sister taxa. Morawanacetus is the earliest diverging aetiocetid with Chonecetus as sister taxon to Aetiocetus species. © 2008 The Linnean Society of London, Zoological Journal of the Linnean Society, 2008, 154, 308–352.