Evolutionary transitions in life-history strategies, such as the shift from egg-laying to live birth (viviparity) are of great interest to evolutionary biologists. In squamate reptiles, several hypotheses have been proposed to explain viviparity including the cold climate hypothesis, maternal manipulation hypothesis, hypoxia hypothesis, and several others. We used two approaches: first we studied 45 species of Liolaemus, a genus where nearly 50% of species are viviparous, using a diverse ecophysiological dataset to examine the cold climate and maternal manipulation hypotheses. We collected environmental thermal data (accounting for elevational differences among species), physiological traits including preferred body temperature and its coefficient of variation as an indicator of precision in thermoregulation. Additionally, we collected standard metabolic rates for 23 of the 45 species. In one clade (the darwinii group of species) with both reproductive modes, we ran our second approach. We tested for differences in thermal physiology and metabolic rates between viviparous and oviparous species during pregnancy and non-pregnancy periods. The cold climate hypothesis received strong support because viviparous species occur in sites with colder air temperatures (including areas at both higher elevations and latitudes) compared with oviparous species. Our detailed analysis showed that the maternal manipulation hypothesis also is supported; pregnant viviparous females show lower variation in their selected temperature. Our evidence suggests that the Andean orogeny is likely to have played a key role in the diversification of Liolaemus lizards and the evolution of viviparity in this clade may have been driven by a variety of physiological advantages accrued at different stages of embryogenesis and over evolutionary time. Thus, historical climate changes may have led to egg retention and may have been accompanied by other adaptations such as thermoregulation precision.