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1 Few studies have addressed the mechanisms of coexistence of shade-tolerant and intolerant tree species in the canopy of old-growth, lowland rain forests of southern South America. We explored the hypothesis that their forest dynamics result from frequent, single tree-fall gap episodes. 2 We analysed the disturbance regime and assessed the regeneration modes of shade-tolerant and intolerant canopy trees in a lowland, old growth North Patagonian rain forest in Chiloé Island (42° S) using dendroecological methods. 3 Dominant canopy trees were the shade-intolerant Nothofagus nitida (Fagaceae), Drimys winteri (Winteraceae) and the tolerant Podocarpus nubigena (Podocarpaceae). The oldest individuals, however, were represented by Saxegothaea conspicua, Podocarpaceae (shade tolerant > 498 years) and Weinmannia trichosperma, Cunoniaceae (intolerant > 382 years). Shade-tolerant species have regenerated continuously for the past 400 years, but recruitment of shade-intolerant species has increased only in the past 50 years. These regeneration patterns suggest a lack of catastrophic disturbance, at least since 1650. 4 Analysis of tree radial growth patterns revealed frequent moderate releases of both shade-tolerant and intolerant tree species, consistent with frequent small-scale disturbances, such as individual tree-fall gaps. Increased releases, peaking in 1940 and followed by enhanced recruitment, may be a consequence of individual tree-falls induced by low-intensity windstorms or limited selective logging. Such disturbances have occurred for at least 250 years, but have had little overall effect on stand structure and canopy composition. 5 The replacement and coexistence of shade-tolerant and intolerant tree species in the canopy of this North Patagonian forest can be explained by frequent small-scale disturbances (i.e. gap-phase dynamics) and by the absence of large-scale natural or anthropogenic disturbances over the past four centuries. Journal of Ecology (2004) 92, 598–608 [ABSTRACT FROM AUTHOR]