[1] The diurnal variability of surface winds over the SE Pacific is characterized with QuikSCAT data for years 2000-2006. The twice daily satellite passes occur around 0600 and 1800 LT (referred to as AM and PM, respectively). The PM-AM wind difference maximizes in a region between 20 degrees S and 30 degrees S, extending from the Chilean coast up to 75 degrees W. This difference is mostly meridional (along the coast) with seasonal variation characterized by summertime weakening of the morning winds. The observational analysis is supplemented with mesoscale model results for December 2003. They show that the coastal zonal flow increases between 0600 and 1200 local time (LT) but then decreases in the next 6 hours, which explains the absence of an onshore component in the QuikSCAT PM-AM difference. Additional model diagnostics show that in this region the diurnal cycle hodographs are more simple and larger above the marine boundary layer (MBL) than at the surface. Evaluation of the momentum and temperature budgets reveals the importance of the diurnal cycle of vertical velocity coupled with the thermal structure in controlling the diurnal cycle of the low-level winds. Around 1300 LT coastal subsidence maximizes in a layer sloping from 1000 m at 36 degrees S to 3000 m at 22 degrees S, inducing the development of a coastal trough at the surface. During the night the passage of a high-pressure perturbation reverses the surface meridional pressure gradient force, inducing the decrease of the coastal meridional winds. These results stress the important role played by the dynamics of the low troposphere above the MBL (e.g., the heating of the Andes Cordillera to the east) in controlling the wind diurnal cycles near the surface.