From The Art and Popular Culture Encyclopedia
Transitional fossils are the fossilized remains of transitional forms of life that illustrate an evolutionary transition. They can be identified by their retention of certain primitive (plesiomorphic) traits in comparison with their more derived relatives, as they are defined in the study of cladistics. "Missing link" is a popular term for transitional forms. Numerous examples exist, including those of primates and early humans.
According to modern evolutionary theory, all populations of organisms are in transition. Therefore, a "transitional form" is a human construct of a selected form that vividly represents a particular evolutionary stage, as recognized in hindsight. Contemporary "transitional" forms may be called "living fossils", but on a cladogram representing the historical divergences of life-forms, a "transitional fossil" will represent an organism at the point where individual lineages (clades) diverge.