The Triassic Period saw the first appearance of numerous amniote lineages (e.g. Lepidosauria, Archosauria, Mammalia) that defined Mesozoic ecosystems following the end Permian Mass Extinction, as well as the first major morphological diversification of crown-group reptiles. Unfortunately, much of our understanding of this event comes from the record of large-bodied reptiles (total body length > 1 m). Here we present a new species of drepanosaurid (small-bodied, chameleon-like diapsids) from the Upper Triassic Chinle Formation of New Mexico. Using reconstructions of micro-computed tomography data, we reveal the three-dimensional skull osteology of this clade for the first time. The skull presents many archaic anatomical traits unknown in Triassic crown-group reptiles (e.g. absence of bony support for the external ear), whereas other traits (e.g. toothless rostrum, anteriorly directed orbits, inflated endocranium) resemble derived avian theropods. A phylogenetic analysis of Permo-Triassic diapsids supports the hypothesis that drepanosaurs are an archaic lineage that originated in the Permian, far removed from crown-group Reptilia. The phylogenetic position of drepanosaurids indicates the presence of archaic Permian clades among Triassic small reptile assemblages and that morphological convergence produced a remarkably bird-like skull nearly 100 Myr before one is known to have emerged in Theropoda.