Analysis of bones 100 million years old showed baby Psittacosaurus had long arms and short legs, which were used to scuttle around shortly after hatching.
The arms grew quickly between the ages of one and three, suggesting that the Psittacosaurus continued to move on all fours during their 'toddler' years.
But aged four, Psittacosaurus - known as the 'parrot dinosaur' - experienced a massive growth spurt in their legs, while the development of their arms slowed.
This meant legs grew to twice the size of arms - causing the dinosaurs to spend their adult life on two feet.
Palaeontologists from Beijing, Bristol and Bonn discovered the differences in limb growth through a combination of biomechanical analysis and bone histology.
Dr Qi Zhao, from the Institute for Vertebrate Palaeontology in Beijing, carried out the intricate study on bones of babies, juveniles and adults.
Dr Zhao, who conducted the research as part of his PhD thesis at the University of Bristol, said: "Some of the bones from baby Psittacosaurus were only a few millimetres across, so I had to handle them extremely carefully to be able to make useful bone sections.
"I also had to be sure to cause as little damage to these valuable specimens as possible."
There are more than 1,000 specimens of Psittacosaurus from the Cretaceous period of China and other parts of east Asia, around 100 million years ago.
Dr Zhao sought special permission from the Beijing Institute to section two arm and two leg bones from 16 individual dinosaurs, aged from less than one year to 10 years old, or fully grown.
He carried out intricate sectioning work in a special palaeohistology laboratory in Bonn in Germany.
The one-year-olds had long arms and short legs and scuttled about on all fours soon after hatching.
Bone sections showed that the arm bones grew fastest when the dinosaurs were aged between one and three.
From four to six years, arm growth slowed down and the leg bones showed a massive growth spurt, meaning they ended up twice as long as the arms.
Professor Xing Xu of the Beijing Institute, who supervised Dr Zhao's thesis, said: "This remarkable study, the first of its kind, shows how much information is locked in the bones of dinosaurs.
"We are delighted the study worked so well, and see many ways to use the new methods to understand even more about the astonishing lives of the dinosaurs."
Professor Mike Benton, of the University of Bristol, who also supervised Dr Zhao's PhD, said: "These kinds of studies can also throw light on the evolution of a dinosaur like Psittacosaurus."
"Having four-legged babies and juveniles suggests that at some time in their ancestry, both juveniles and adults were also four-legged, and Psittacosaurus and dinosaurs in general became secondarily bipedal."
The paper, 'Histology and postural change during the growth of the ceratopsian dinosaur Psittacosaurus lujiatunensis', is published today in Nature Communications.
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