The first specimens of what would later be named Thescelosaurus were discovered during the bone wars, a heated rivalry between the paleontologists Edward Drinker Cope and Othniel Charles Marsh.

In July 1891, the fossil hunter John Bell Hatcher, who had been hired by Marsh, and his assistant William H. Utterback discovered a near-complete skeleton of a small herbivorous dinosaur along Doegie Creek in Niobrara County, Wyoming, in rocks of the Lance Formation.

[1][7] He identified six more specimens, including a shoulder blade with coracoid, a neck vertebra, and a toe bone, as well as three partial skeletons that had been collected by Barnum Brown and were stored in the American Museum of Natural History (AMNH).

The neck and skull remained unknown, however, and Gilmore restored these missing parts based on Hypsilophodon, which he considered a close relative, in his skeletal and life reconstructions.

[11] In 1940, Sternberg named an additional species, T. edmontonensis, based on another articulated skeleton (CMN 8537) that he had discovered in the Edmonton Formation of Rumsey, Alberta.

[12][2] It preserves most of the vertebral column, pelvis, legs, scapula, coracoid, arm, and, most significantly, multiple bones of the skull roof and a complete mandible, the first known from Thescelosaurus.

Morris concluded that its ankle anatomy and larger size was unique, and therefore named the new species Thescelosaurus garbanii, in honor of the discoverer Garbani.

Significantly, this tooth reportedly came from the Late Jurassic Kimmeridge Clay Formation of Weymouth, England, and therefore is roughly 70 million years older than the Bugenasaura type specimen and from another continent.

The key specimen, however, was NCSM 15728, nicknamed "Willo", which was found in the upper Hell Creek Formation in Harding County, South Dakota by Michael Hammer in 1999.

This situation improved in 2014, when Boyd and colleagues reported a new specimen from the Hell Creek Formation of Dewey County, South Dakota (TLAM.BA.2014.027.0001), that was collected from private lands by Bill Alley before being donated to the Timber Lake and Area Museum.

[21] In 2022, news media reported that a specimen of Thescelosaurus was found at the Tanis fossil site in North Dakota, which is thought to show direct signs of the Chicxulub asteroid impact in the Gulf of Mexico that resulted in the K-Pg extinction.

[21]: 63  Both the maxilla and the dentary had up to twenty cheek teeth on each side, which is again similar to basal ornithischians and unlike other neornithischians, which had a reduced tooth count.

Gilmore described patches of carbonized material near the shoulders as possible epidermis, with a "punctured" texture, but no regular pattern,[7] while Morris suggested that armor was present, in the form of small scutes he interpreted as located at least along the midline of the neck of one specimen.

[32] In 2022, news media reported that the Tanis specimen preserves skin impressions on a leg that show that parts of the animal were covered in scales.

[36][37] Galton classified Thescelosaurus as a member of Iguanodontidae based on hindlimb proportions in 1974, but this family was found to be polyphyletic (not a natural group);[14] he therefore returned to a hypsilophodontid classification in 1995.

[38][14][39] This concept of Hypsilophodontidae as an inclusive monophyletic (natural) group was supported by the early cladistic studies of Paul C. Sereno, David B. Weishampel, and Ronald Heinrich, who found Thescelosaurus to be the most basal hypsilophodontid.

[43][44][45] An issue with T. neglectus prior to the revision by Boyd and colleagues in 2009 was the uncertainty about the assigned specimens, including the separation of Bugenasaura and the unresolved question of whether T. edmontonensis was distinct or not.

The contemporary pachycephalosaur Stegoceras, in contrast, was probably a more indiscriminate feeder, allowing both animals to share the same environment without competing for food (niche partitioning).

[2] Other subsequent studies disagreed with Gilmore idea of a proficient runner given the robust skeleton, the proportionally long femur, and the short lower leg bones.

[14] Phil Senter and Jared Mackey, in 2024, concluded that a quadrupedal posture would have been theoretically possible, as the spine of the back was bent down, allowing the hand to touch the ground even when the hind limbs were straight.

[53] A 2023 study by David Button and Lindsay Zanno concluded that Thescelosaurus was less adapted for running than other thescelosaurids but nonetheless showed two traits that are common in runners.

Poor hearing and an acute sense of smell are commonly found in modern animals that create burrows, leading Button and Zanno to suggest that Thescelosaurus may have been semi-fossorial.

The relatively large size of Thescelosaurus does not necessarily preclude burrowing behaviour, as tunnels have been associated with the only slightly smaller Oryctrodromeus and with much larger mammals.

The two supposed ventricles and the single aorta are consistent with a four-chambered heart as found in modern birds and mammals, suggesting an elevated metabolic rate for Thescelosaurus.

[59] Thescelosaurus is definitively known only from deposits in western North America dating to the late Maastrichtian age, just before the Cretaceous-Paleogene Extinction Event 66.04 million years ago.

[73] The floral assemblages of the Frenchman Formation show that southern Saskatchewan was a subtropical to warm temperate environment, with seasons and an average mean temperature of 54–57 °F (12–14 °C).

[72] Within the Hell Creek Formation of Montana, Thescelosaurus lived alongside dinosaurs including Leptoceratops, pachycephalosaurids Pachycephalosaurus, Stygimoloch and Sphaerotholus, the hadrosaurid Edmontosaurus and possibly Parasaurolophus, ceratopsians like Triceratops and Torosaurus, the nodosaurid Edmontonia and ankylosaurid Ankylosaurus, multiple dromaeosaurids and troodontids, the ornithomimid Ornithomimus, the caenagnathid Elmisaurus, tyrannosaurids including Tyrannosaurus, an alvarezsaurid, and the bird Avisaurus.

The dinosaur fauna of the Frenchman Formation is similar, with the presence of pachycephalosaurids, Edmontosaurus, Triceratops, Torosaurus, ankylosaurids, dromaeosaurids, troodontids, ornithomimids, caenagnathids, and Tyrannosaurus, as well as the intermediate theropod Richardoestesia.

[60] The Lance Formation contains one of the best known faunas from the Late Cretaceous, with a diverse assemblage of cartilaginous and bony fishes, frogs, salamanders, turtles, champsosaurs, lizards, snakes, crocodilians, pterosaurs, mammals, and birds such as Potamornis and Palintropus.

[60][71] The dinosaurs of the Lance Formation include troodontids such as Pectinodon and Paronychodon, dromaeosaurids, the ornithomimid Ornithomimus, the caenagnathid Chirostenotes, the tyrannosaurid Tyrannosaurus, the pachycephalosaurids Pachycephalosaurus and Stygimoloch, the hadrosaurid Edmontosaurus, ankylosaurs such as Edmontonia and Ankylosaurus, and ceratopsians such as Leptoceratops, Triceratops, and Torosaurus.