Modern humans began dominating the world far earlier than thought, according to anthropologists who say they've discovered fossils of a new human dwarf species.

One specimen appears to be an adult female less than one metre tall with slight dimensions, coarse features and a skull the size of a grapefruit.

The creature lived about 18,000 years ago on the remote Indonesian island of Flores east of Java, leading researchers to dub it Homo floresiensis, "Man of Flores."

Skull of hominid Homo floresiensis, top, and a modern human. (Courtesy: Peter Brown)

"It challenges the whole idea of what it is that makes us human," Prof. Chris Stringer, of the Natural History Museum in London, told a news conference on Wednesday.

For decades, researchers believed Homo sapiens dominated the world. The new find may mean we coexisted with another Homo species more recently than thought, some anthropologists say.

The discovery includes the skull, femur and tibia, hand and vertebrae fragments from one individual, and a premolar from another.

Peter Brown of the University of New England in Australia and his colleagues describe the fossils and their archeological significance in Thursday's issue of the journal Nature.

The researchers think the new species descended from full-sized Homo erectus, which are thought to be the forebears of Homo sapiens.

"They are among the most outstanding discoveries in paleoanthropology for half a century," wrote University of Cambridge anthropologists Marta Mirazon Lahr and Robert Foley in a Nature commentary.

Species debate

The find includes small canine teeth and evidence of walking upright – key traits of the genus Homo, the pair said.

Evidence from the cave site suggests Flores Man made stone tools, lit fires and hunted in groups. The fossils were found together with prehistoric dwarf elephants and Komodo dragons.

Since the specimen bears little resemblance to modern humans or an australopithecine like Lucy, not all anthropologists agree it belongs in the genus Homo.

A lack of food and overpopulation may have pressured Flores Man to shrink in height, the researchers speculated. Over time, it was replaced by taller hominids with bigger brains.

Documenting whether the two species interacted is a priority for future research, said study co-author Mike Morwood of University of New England.