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Late Cretaceous trends in Asian dinosaur diversity are poorly understood, but recent discoveries have documented a radiation of oviraptorosaur theropods in China and Mongolia. However, little work has addressed the factors that facilitated this diversification. A new oviraptorid from the Late Cretaceous of Mongolia sheds light on the evolution of the forelimb, which appears to have played a role in the radiation of oviraptorosaurs. Surprisingly, the reduced arm has only two functional digits, highlighting a previously unrecognized occurrence of digit loss in theropods. Phylogenetic analysis shows that the onset of this reduction coincides with the radiation of heyuannine oviraptorids, following dispersal from southern China into the Gobi region. This suggests expansion into a new niche in the Gobi region, which relied less on the elongate, grasping forelimbs inherited by oviraptorosaurs. Variation in forelimb length and manus morphology provides another example of niche partitioning in oviraptorosaurs, which may have made possible their incredible diversity in the latest Cretaceous of Asia.