Mollusks along the Pacific coast of South America provide one of the main exceptions from the latitudinal diversity gradient of decreasing species numbers toward the poles. From 42°S southward, coincident with the onset of the mosaic coastline of the southern Chilean fiordlands, species numbers show a twofold to threefold increase compared to the central Chilean coast. Here we use the Neogene fossil record of central and southern Chile to test hypotheses on the origin of this unusual pattern. Contrary to previous suggestions, we did not find evidence for a buildup of biodiversity since the Eocene, or for the northward spread of Antarctic taxa into southern mid-latitudes. Rather, our data suggest that the mosaic coastline south of 42°S was colonized after the retreat of the glaciers from their marine termini since the later Pleistocene, by taxa that were already present along the Chilean coast. The majority of the most species-rich genera in this area are shallow-water hardground inhabitants, suggesting a rapid adaptive radiation of these taxa. The unusually low present-day diversity to the north of 42°S most likely results from the severe late Neogene extinction and only moderate subsequent origination in this area.