Birds and other reptiles possess a diversity of feather and scale-like skin appendages. Feathers are commonly assumed to have originated from ancestral scales in theropod dinosaurs. However, most birds also have scaled feet, indicating birds evolved the capacity to grow both ancestral and derived morphologies. This suggests a more complex evolutionary history than a simple linear transition between feathers and scales. We set out to investigate the evolution of feathers via the comparison of transcriptomes assembled from diverse skin appendages in chicken, emu, and alligator. Our data reveal that feathers and the overlapping ‘scutate’ scales of birds share more similar gene expression to each other, and to two types of alligator scales, than they do to the tuberculate ‘reticulate’ scales on bird footpads. Accordingly, we propose a history of skin appendage diversification, in which feathers and bird scutate scales arose from ancestral archosaur body scales, whereas reticulate scales arose earlier in tetrapod evolution. We also show that many “feather-specific genes” are also expressed in alligator scales. In-situ hybridization results in feather buds suggest that these genes represent ancestral scale genes that acquired novel roles in feather morphogenesis and were repressed in bird scales. Our findings suggest that the differential reuse, in feathers, and suppression, in bird scales, of genes ancestrally expressed in archosaur scales has been a key factor in the origin of feathers – and may represent an important mechanism for the origin of evolutionary novelties. Overall design: In chicken and emu we sampled two biological replicates for epidermis from each of five skin tracts at two developmental stages (placode and morphogenesis): dorsal and femoral/flank feathers, scutate scales, reticulate scales, and claws. In chicken, we additionally sampled a single biological replicate from dermis from all 5 skin tracts at both developmental stages. In alligator we sampled two biological replicates for epidermis from 3 skin tracts at two developmental stages (placode and morphogenesis): dorsal scales, femoral scales, and claws.