Humans tend to swing their arms when they walk, a curious behaviour since the arms play no obvious role in bipedal gait. It might be costly to use muscles to swing the arms, and it is unclear whether potential benefits elsewhere in the body would justify such costs. To examine these costs and benefits, we developed a passive dynamic walking model with free-swinging arms. Even with no torques driving the arms or legs, the model produced walking gaits with arm swinging similar to humans. Passive gaits with arm phasing opposite to normal were also found, but these induced a much greater reaction moment from the ground, which could require muscular effort in humans. We therefore hypothesized that the reduction of this moment may explain the physiological benefit of arm swinging. Experimental measurements of humans (n = 10) showed that normal arm swinging required minimal shoulder torque, while volitionally holding the arms still required 12 per cent more metabolic energy. Among measures of gait mechanics, vertical ground reaction moment was most affected by arm swinging and increased by 63 per cent without it. Walking with opposite-to-normal arm phasing required minimal shoulder effort but magnified the ground reaction moment, causing metabolic rate to increase by 26 per cent. Passive dynamics appear to make arm swinging easy, while indirect benefits from reduced vertical moments make it worthwhile overall.