Oryctodromeus cubicularis lived around 95 million years ago and was a two-legged vegetarian around two metres (nearly seven feet) long.
The skeleton displays features found in burrowing mammals, including strong hips that could brace against the forces generated while digging, and shoulders showing signs of powerful muscles. It also has a shovel-like snout.
An adult and two young were found in a den that resembles those of today's burrowing animals.
Researchers suggest underground living may have allowed some dinosaurs to survive the "nuclear winter" caused by an asteroid impact that is thought to have led to the extinction of their surface-dwelling relatives. However no known dinosaur remains date from after the catastrophe.