Here we describe the litopterns, a diverse and temporally long-ranging clade of South American native ‘ungulates’, of the early Miocene Pampa Castillo fauna from the Galera Formation in the Andean Cordillera of southern Chile, and present a new phylogeny of Proterotheriidae, the most speciose litoptern subgroup. Two proterotheriids occur at Pampa Castillo: Thoatherium, the northernmost and first record of this taxon outside Santa Cruz Province, Argentina, and Picturotherium, known previously solely from the Pinturas Formation of north-western Santa Cruz Province. Macraucheniidae are represented at Pampa Castillo by Theosodon. Collectively, these three taxa suggest an early Miocene (Santacrucian South American Land Mammal ‘Age’ (SALMA)) age for the fossil mammal fauna from Pampa Castillo, reinforcing previous biochronological interpretations. Results of a comprehensive phylogenetic analysis identify Megadolodus molariformis as the earliest-diverging member of Proterotheriidae, a name for which we propose a stem-based definition. Few multi-species proterotheriid genera were recovered as monophyletic in our analysis. Three ‘anisolambdid’ litopterns, initially assumed to represent outgroups, instead nest deeply within Proterotheriidae, implying long ghost lineages. The phylogenetic placement of the four proterotheriids from the middle Miocene La Venta fauna of Colombia sheds light on the poorly understood long-term isolation of tropical faunas and their degree of exchange with high-latitude regions. Santacrucian SALMA assemblages in Patagonia are notable in that older localities preferentially produce earlier-diverging proterotheriids. Older sites are also marked by a mix of brachyodont and hypsodont taxa, whereas younger sites yield strictly hypsodont forms, supporting the notion of increasing aridity in Patagonia through this interval. Proterotheriids alone cannot be used to discriminate between an early or late Santacrucian age for the Pampa Castillo fauna, but the brachyodonty of Picturotherium suggests a humid climate and closed habitats.