The continental shelf off central Chile is subject to strong seasonal coastal upwelling and has been recognized as an important outgassing area for, amongst others, N2O, an important greenhouse gas. Several physical and biogeochemical variables, including N2O, were measured in the water column from August 2002 to January 2007 at a time series station in order to characterize its temporal variability and elucidate the physical and biogeochemical mechanisms affecting N2O levels. This 4-year time series of N2O levels reveals seasonal variability associated basically with hydrographic and oceanographic regimes (i.e., upwelling and non-upwelling). However, a noteworthy temporal evolution of both the vertical distribution and N2O levels was observed repeatedly throughout the entire study period, allowing us to distinguish three stages: winter/early spring (Stage I), mid-spring/mid-summer (Stage II), and late summer/early autumn (Stage III). Stage I presents low N2O, the lowest surface saturation ever registered (from 64% saturation) in a period of high O2, and a homogeneous column driven by strong wind; this distribution is explained by physical and thermodynamic mechanisms. Stage II, with increasing N2O concentrations, agrees with the appearance of upwelling-favourable wind stress and a strong influence of oxygen-poor, nutrient-rich equatorial subsurface waters (ESSW). The N2O build-up creates a "hotspot" (up to 2426% N2O saturation) and enhanced concentrations of NO2- (up to 3.97 μM) and NH4+ (up to 4.6 μM) at the oxycline (4-28 μM) (∼20-40 m depth). Although the dominant N2O sources could not be determined, denitrification (mainly below the oxycline) appears to be the dominant process in N2O accumulation. Stage III, with diminishing N2O concentrations from mid-summer to early autumn, was accompanied by low N/P ratios. During this stage, strong bottom N2O consumption (from 40% saturation) was suggested to be mainly driven by benthic denitrification. Consistent with the evolution of N2O in the water column over time, the estimated air-sea N2O fluxes were low or negative in winter (-9.8 to 20 μmol m-2 d-1, Stage I) and higher in spring and summer (up to 195 μmol m-2 d-1, Stage II), after which they declined (Stage III). In spite of the occurrence of ESSW and upwelling events throughout stages II and III, N2O behaviour should be a response of the biogeochemical evolution associated with biological productivity and concomitant O2 levels in the water and even in the sediments. The results presented herein confirm that the study area is an important source of N2O to the atmosphere, with a mean annual N2O flux of 30.2 μmol m-2 d-1; however, interannual variability could not yet be properly characterized.