Pottsiella erecta (Potts, 1884) is a freshwater benthic colonial species of the Ectoprocta, Class Gymnolaemata. Despite a number of published observations on P. erecta, the species has remained poorly understood and its relationships to other freshwater gymnolaemates unclear. The present study provides anatomical and brooding characteristics pertinent to resolving the relationship of P. erecta with other freshwater gymnolaemates. Among several features, P. erecta contains a collar, lacks any manifestation of the wall of the cardia, has a continuous funiculus, a simple communication plate, lacks a dorso-ventral muscle, and is an external brooder. The combination of characters precludes placing P. erecta with any freshwater or marine group and the monotypic family Pottsiellidae is reinstated for this species. An expanded diagnosis of the Pottsiellidae is provided.