The latitudinal diversity gradient is the largest scale, and longest known, pattern in ecology. We examined the applicability of three versions of the energy hypothesis, the habitat heterogeneity hypothesis, and historical contingency to the gradient of terrestrial birds. The productivity version of the energy hypothesis, tested using actual evapotranspiration, a water-energy variable closely associated with plant productivity, accounted for 72% of the variance in a model of global extent. An historical contingency model based on biogeographic region explained 58% of the variance. A combined climate-region model accounted for 78% of the variance, but 52% comprised the overlap between these effects. This suggests that further resolution of contemporary vs. historical processes at the global level will require the inclusion of phylogenetic information. Regional-extent regression models suggest a latitudinal shift in constraints on diversity; measures of ambient energy (potential evapotranspiration and mean annual temperature) best predicted the diversity gradient at high latitudes, whereas water-related variables (actual evapotranspiration and annual rainfall) best predicted richness in low-latitude, high-energy regions. Intraregional spatial autocorrelation analysis confirmed that climatic models adequately describe geographic richness patterns at all but the smallest spatial scales resolved by the analysis. We conclude that the "water-energy dynamics" hypothesis, originally developed for plant diversity gradients, offers a parsimonious explanation for bird diversity patterns as well, presumably operating via plant productivity. However, more refined tests of historical factors are needed to fully resolve their influences on the gradient.