The island effect is a well-known evolutionary phenomenon, in which island-dwelling species isolated in a resource-limited environment often modify their size, anatomy, and behaviors compared with mainland relatives. This has been well documented in modern and Cenozoic mammals, but it remains unclear whether older, more primitive Mesozoic mammals responded in similar ways to island habitats. We describe a reasonably complete and well-preserved skeleton of a kogaionid, an enigmatic radiation of Cretaceous island-dwelling multituberculate mammals previously represented by fragmentary fossils. This skeleton, from the latest Cretaceous of Romania, belongs to a previously unreported genus and species that possesses several aberrant features, including an autapomorphically domed skull and one of the smallest brains relative to body size of any advanced mammaliaform, which nonetheless retains enlarged olfactory bulbs and paraflocculi for sensory processing. Drawing on parallels with more recent island mammals, we interpret these unusual neurosensory features as related to the island effect. This indicates that the ability to adapt to insular environments developed early in mammalian history, before the advent of therian mammals, and mammals with insular-related modifications were key components of well-known dwarfed dinosaur faunas. Furthermore, the specimen suggests that brain size reduction, in association with heightened sensory acuity but without marked body size change, is a novel expression of the island effect in mammals.