Abstract Numerus well preserved fossils from the Upper Permian of Madagascar are structurally intermediate between primitive diapsid reptiles and nothosaurs and plesiosaurs. Claudiosaurus germaini (gen.nov., sp.nov.) is similar in its basic anatomy to eosuchian reptiles such as Thadeosaurus colcanapi (gen.nov., sp.nov.), but the absence of a lower temporal bar and the closure of the palate are characteristics of sauropterygian reptiles. Claudiosaurus shows the initiation of aquatic adaptations in the proportions and reduced ossification of the carpus and manus. A third pair of sacral ribs is partially incorporated. The small size of the skull, the nature of the palate and marginal dentition and the long neck are suggestive of aquatic feeding habits. Claudiosaurus does not, however, show the specific adaptations for aquatic locomotion seen in either nothosaurs or plesiosaurs. Even the most primitive known species of nothosaurs and plesiosaurs are too specialized in the postcranial skeleton for direct comparison with Claudiosaurs, although the similarities to the skull roof of primitive nothosaurs are very close. The configuration of the cheek in nothosaurs almost certainly resulted from the loss of the lower temporal bar from a pattern like that of Youngina, rather than from the ventral emargination of the cheek. The nature of the Upper Permian sediments in Madagascar and the tectonic environment of their deposition indicate accumulation in deep rift valleys, some parts of which were open to the sea. The presence of oolites replaced with collophane suggests a rich phosphate source such as deep marine upwellings. Similar upwellings of phosphate have also been associated with the evolution of the marine iguanas on the Pacific coast of South America. The concept of the derivation of nothosaurs from protorosaurs or araeosceloids may be traced to misunderstandings of the nature of the cheek in both Nothosaurus and Protorosaurus. Araeoscelis, despite the possession of a solid cheek, is closely related to Petrolacosaurus, an ancestral diapsid.