Aigialosaurs are known from three nearly complete skeletons from the Upper Cretaceous (Cenomanian-Turonian) of Yugoslavia. The Aigialosauridae is identified as the sister-group of mosasaurs on the basis of the following shared derived characters: fusion of frontal bones; circular configuration of quadrate; well-developed hinge joint between angular and splenial; surangular and articular contributing equally to articulating surface of lower jaw; reduction of transverse processes and zygapophyses of caudal vertebrae. No significant characters of the skull are known that distinguish aigialosaurs from primitive mosasaurs. In contrast, the trunk vertebrae and the limbs are indistinguishable from those of terrestrial varanoids. The tail and the ventral elements of the pelvic girdle resemble those of some other aquatic diapsids. Aigialosaurs share many derived characters with modern varanids (including Lanthanotus and Varanus and the Eocene genus Saniwa), to the exclusion of the Upper Cretaceous varanids Saniwides and Telmasaurus. This suggests an earlier Cretaceous dichotomy separating advanced varanids and aigialosaurs from more primitive genera now included in the Varanidae.