Living crocodilians (Crocodylia) and birds (Neornithes) differ in many aspects of hindlimb anatomy and locomotor function. How did this disparity evolve? We integrate information from fossils with functional descriptions of locomotion in living crocodilians and birds, using a phylogenetic perspective. We then outline the major changes in three-dimensional control of the hip joint along the line from the ancestral archosaur to birds. Our analysis reveals that most aspects of hip morphology and function in Alligator are ancestral for Archosauria. Femoral protractors and retractors are located cranial and caudal to the hip, respectively. Similarly, femoral adductors and abductors are located ventral and dorsal to the hip. Transformations of this ancestral pattern on the line to birds involved modifications in osteology, myology, and neural control. In some cases, homologous muscles changed function by acquiring new activity patterns. In others, activity was conserved, but origins and/or insertions were altered. Fossil theropods document the stepwise evolution of a novel mechanism of limb adduction/abduction involving long-axis rotation of the femur. This mechanism accounts for the conspicuous absence of significant musculature ventral and dorsal to the hip joint in extant birds.