Since Hampé’s classic developmental experiments in the mid-twentieth century1,2, the reduced avian fibula has sparked sustained curiosity3–6. The fibula transformed throughout dinosaur evolution from a columnar structure into its splint-like avian form, a change long thought to be of little biomechanical consequence3,6. Here we integrated comparative three-dimensional kinematic analyses with transitional morphologies from the fossil record to refute this assumption and show that the reduced fibula serves a crucial function in enabling extreme knee long-axis rotation (LAR). Extreme LAR is fundamental to avian locomotion and is regularly exploited by living birds to execute complex terrestrial manoeuvres7. We infer that the evolution of this capacity was preceded by restriction of the knee to hinge-like motion in early theropod dinosaurs, driven by the origin of a mid-shank articulation8 that precluded ancestral patterns of tibiofibular motion. Freeing of the fibula from the ankle joint later enabled mobilization of this initially static articulation and, in doing so, established a novel pattern of tibiofibular kinematics essential to the extreme levels of LAR retained by modern birds. Fibular reduction thus ushered in a transition to LAR-dominated three-dimensional limb control, profoundly altering the course of theropod locomotor evolution. Using three-dimensional kinematic analyses, fibular reduction is shown to have a functional evolutionary adaptative role in birds to enable knee long-axis rotation.