Over one hundred specimens assigned to three species of the cephalopod genus Bactroceras (=Eobactrites) from the Ordovician of the Prague Basin (Czech Republic) have been studied in detail. Preservation of the material allows study of external features including the embryonic shell, as well as some internal structures of the shell. Muscle scars, described for the first time in Bactroceras, show a simple, unpaired and low, dorsally-situated lobe (“orthoceridan” type of muscle scars). The type species of the genus, Bactroceras avus, is synonymized with Bactroceras sandbergeri based on strong similarities in the outer morphology of the shell and the position and internal structure of the siphuncle. A new species of Bactroceras from Bolivia is erected: Bactroceras boliviensis. Orthoceras interpolatum Barrande, 1870, from the Upper Ordovician of Bohemia, is assigned to Bactroceras; it is one of the stratigraphically youngest species of the genus. The assignment of Orthoceras gossei Etheridge to Bactroceras is rejected. Convergence with bactritids and the classification of Bactroceras as the oldest known member of the order Orthocerida is discussed. The exact stratigraphic occurrences of Bactroceras are refined, and the palaeobiogeographic significance of the genus is evaluated. It suggests origin of the genus in high-latitude margins of Gondwana, and its expansion to low-latitude regions during the Ordovician as part of the early radiation of pelagic cephalopods.