Abstract Biodiversity currently peaks at the equator, decreasing toward the poles. Growing fossil evidence suggest that this hump-shaped latitudinal diversity gradient (LDG) has not been persistent through time, with similar species diversity across latitudes flattening out the LDG during past greenhouse periods. This provides a new starting point for LDG research. Most studies assume the processes shaping the LDG have acted constantly through time and seek to understand why diversity accumulated in the Holarctic at lower levels than at the equator, e.g. as the result of limited dispersal, or higher turnover in Holarctic regions. However, fossil investigations suggest that we need to explain when and why diversity was lost at high latitudes to generate the LDG. Unfortunately, diversity lost scenarios in the Holarctic have been repeatedly proposed but not yet clearly demonstrated. Here, we use diversification approaches for both phylogenies and fossils to study the LDG of Testudines, Crocodilia and Lepidosauria. We show the LDG of these groups has varied over time, with high latitudes serving as a source of tropical diversity but suffering disproportionate extinction during transitional periods to cold climate. We outline the ‘asymmetric gradient of extinction and dispersal’ (AGED) framework, which contextualizes previous ideas behind the LDG under a time-variable scenario. We suggest the current steep LDG may be explained by the extinction of clades adapted to warmer conditions from the new temperate regions formed in the Neogene, together with the equator-ward dispersal of organisms tracking their own climatic preferences, when tropical biomes became restricted to the equator. Conversely, high rates of speciation and pole-ward dispersals can account for the formation of an ancient flat LDG during the Cretaceous–Paleogene greenhouse period. Our results demonstrate that the inclusion of fossils in macroevolutionary studies allows detecting extinction events less detectable in analyses restricted to present-day data only.