We describe cranial and mandibular remains of three undescribed individuals of the giant mustelid Megalictis ferox Matthew, 1907 from the latest Arikareean (Ar4), Early Miocene mammal fauna of Nebraska, and Wyoming (USA) housed at the American Museum of Natural History (New York, USA). Our phylogenetic hypothesis indicates that Ar4 specimens assigned to M. ferox constitute a monophyletic group. We assign three additional species previously referred to Paroligobunis to Megalictis: M. simplicidens, M. frazieri, and "M." petersoni. The node containing these four species of Megalictis and Oligobunis forms the Oligobuninae. We test the hypothesis that Oligobuninae (Megalictis and Oligobunis) is a stem mustelid taxon. Our results indicate that the Oligobuninae form the sister clade to the crown extant mustelids. Based on the cranium, M. ferox is a jaguar-size mustelid and the largest terrestrial mustelid known to have existed. This new material also sheds light on a new ecomorphological interpretation of M. ferox as a bone-crushing durophage (similar to hyenas), rather than a cat-like hypercarnivore, as had been previously described. The relative large size of M. ferox, together with a stout rostrum and mandible made it one of the more powerful predators of the Early Miocene of the Great Plains of North America.