Palynological data from four surface sections in northern Tierra del Fuego, southern Argentina, provide a biostratigraphical and palaeoenvironmental framework for the lower member of the La Despedida Formation and the Cabo Peña Formation in their type areas. Selected dinoflagellate cyst (dinocyst) events indicate that the age of the lower member of the La Despedida Formation is Middle Eocene and that of the Cabo Peña Formation is Late Eocene–earliest Oligocene. The age assigned to the La Despedida Formation agrees with determinations based on calcareous microfossils, but there is a potential discrepancy regarding the Cabo Peña Formation. According to recent stratigraphic studies, the Cabo Domingo Group, which includes the Cabo Peña Formation, is Late Eocene–Miocene in age. The palynomorph assemblages from the lower member of the La Despedida Formation contain the endemic ‘Transantarctic Flora’, which reflects marginal marine conditions. The maximum abundance of Enneadocysta spp. reflects more open-sea conditions and a warming event during the late Middle Eocene. The lower part of the Cabo Peña Formation has a high ratio of dinocysts to sporomorphs and an abundance of Nematosphaeropsis lemniscata, Reticulatosphaera actinocoronata and Impagidinium spp., suggesting an oceanic to outer neritic environment. Abundant Gelatia inflata and protoperidiniacean cysts indicate cool surface waters rich in dissolved nutrients. These cold-water markers may reflect the development of the Antarctic Circumpolar Current, an important event in the transition from a greenhouse to an icehouse climate mode. Toward the top of the sections, the lower ratios of dinocysts to sporomorphs, as well as the composition of the dinocyst assemblages, reflect a neritic rather than an oceanic setting. This palynological change may be due to eustatic sea-level lowering caused by cooling during the latest Eocene–earliest Oligocene. A new species, Spiniferites scalenus, is described and the new combination Lingulodinium echinatum proposed; an emendation for the latter species is also proposed.