The animal group has previously only been thought to lay eggs, but a remarkable 250 million-year-old fossil, found in China, disproves this as it shows an embryo growing inside the mother.
The embryo may have been around half a metre long and is positioned inside the rib cage of the adult Dinocephalosaurus fossil, which was discovered in 2008 in Luoping County, Yunnan Province in southern China.
Until this discovery, the third major group of living land vertebrates - the crocodiles and birds, part of the wider group Archosauromorpha - was thought to only lay eggs.
"Upon closer inspection and searching the literature, I realized that something unusual has been discovered"-an embryo providing "clear evidence for live birth". The fact that it has never been seen among archosauromorphs led evolutionary biologists to assume it was constrained by an unknown mechanism. Jun Liu, a paleontologist at the Chinas Hefei University of Technology said, It had paddle-like flippers, a small head and a mouth with teeth including large canines, flawless for snaring fish.
Dinocephalosaurus is the first member of a broad vertebrate group called archosauromorphs that includes birds, crocodilians, dinosaurs and extinct flying reptiles known as pterosaurs known to give birth this way, paleontologist Jun Liu of China's Hefei University of Technology said.
The new study pushes fossil evidence for the reproductive biology of archosaurs back by 50 million years, to the Middle Triassic, said the study.
It was a fish eater, snaking its long neck from side to side to catch prey.
"We were not sure if the embryonic specimen was the mother's last lunch or its unborn baby", Professor Liu said.
The team also factored in the possibility that the tiny reptile had been inside an egg shell which simply eroded over time but concluded this was unlikely as there were no shell bits found and the creature "demonstrates the curled posture typical for vertebrate embryos".
Co-author Prof Chris Organ, from Montana State University, added: "Some reptiles today, such as crocodiles, determine the sex of their offspring by the temperature inside the nest". The authors say that genetic sex determination and live birth seem to have been necessary for animals like Dinocephalosaurus to become aquatic.
The discovery has significant implications for scientists' understanding of the evolution of reproductive systems.