The spate of recent discoveries of Mesozoic birds has substantially improved our understanding of the early evolution of birds and flight(1-5), but has failed to close the morphological gap between the Upper Jurassic Archaeopteryx lithographica, the earliest known bird, and the Dromaeosauridae, the group of non-avian theropod dinosaurs regarded as most closely related to birds(6,7). Here we describe a theropod dinosaur from Patagonia, Unenlagia comahuensis gen. et sp. nov., which partially fills this gap. Despite the relatively late appearance of this dinosaur in the fossil record (Upper Cretaceous), several features of Unenlagia are more birdlike than in any other non-avian theropod so far discovered. Unenlagia resembles Archaeopteryx in the morphology of the scapula, pelvis and hindlimb. But several shared, primitive features of the pubis, ischium and hindlimb proportions suggest that Unenlagia may represent the sister taxon of the Avialae (=Aves). The structure of the forelimb suggests that the avian mode of forelimb folding, and the extensive forelimb elevation necessary for powered, lapping flight, was already present in cursorial, non-flying theropod dinosaurs.