The crisis has been called the Carnian Pluvial Episode.
A team of 17 researchers reviewed all the geological and palaeontological evidence to determine what happened.
They suggest the cause was most likely massive volcanic eruptions in the Wrangellia Province of western Canada, where huge volumes of volcanic basalt was poured out and formed much of the western coast of North America.
We have identified another great extinction event, and it evidently had a major role in helping to reset life on land and in the oceans, marking the origins of modern ecosystems
The study was led by Jacopo Dal Corso of the China University of Geosciences at Wuhan and Mike Benton of the University of Bristol’s School of Earth Sciences.
Prof Dal Corso, said: “The eruptions peaked in the Carnian.
“I was studying the geochemical signature of the eruptions a few years ago and identified some massive effects on the atmosphere worldwide.
“The eruptions were so huge, they pumped vast amounts of greenhouse gases like carbon dioxide, and there were spikes of global warming.”
He added: “So far, palaeontologists had identified five ‘big’ mass extinctions in the past 500 million yeas of the history of life.
“Each of these had a profound effect on the evolution of the Earth and of life.
“We have identified another great extinction event, and it evidently had a major role in helping to reset life on land and in the oceans, marking the origins of modern ecosystems.”
Researchers say the warming was associated with increased rainfall, which had been detected in the 1980s by geologists Mike Simms and Alastair Ruffell as a humid episode lasting about one million years.
According to the study published in Science Advances, the climate change caused major biodiversity loss in the ocean and on land, but just after the extinction event new groups took over, forming more modern-like ecosystems.
The shifts in climate encouraged the growth of plant life, and the expansion of modern conifer forests, the researchers say.
Prof Benton said: “The new floras probably provided slim pickings for the surviving herbivorous reptiles.
“I had noted a floral switch and ecological catastrophe among the herbivores back in 1983 when I completed my PhD.
“We now know that dinosaurs originated some 20 million years before this event, but they remained quite rare and unimportant until the Carnian Pluvial Episode hit.
“It was the sudden arid conditions after the humid episode that gave dinosaurs their chance.”
Researchers say that it was not just dinosaurs, but also many modern groups of plants and animals that appeared at this time, including some of the first turtles, crocodiles, lizards, and mammals.
They further suggest the Carnian Pluvial Episode also had an impact on ocean life, and marks the start of modern-style coral reefs, as well as many of the modern groups of plankton.
