The modern eastern equatorial Pacific (EEP) is a major natural source for atmospheric carbon dioxide and is thought to be connected to high-latitude ocean dynamics by oceanic teleconnections on glacial-interglacial timescales. A wealth of sedimentary records aiming at reconstructing last Quaternary changes in primary productivity and nutrient utilization have been devoted to understanding those linkages between the EEP and other distant oceanic areas. Most of these records are, however, clustered in the pelagic EEP cold tongue, with comparatively little attention devoted to coastal areas. Here we present downcore measurements of the composition and concentration of the diatom assemblage together with opal (biogenic silica) concentration at site MD02-2529 recovered in the coastal Panama Basin. Piston core MD02-2529, collected in an area affected by a multitude of processes, provides evidence for strong variations in diatom production at the millennial timescale during the last glacial cycle. The maxima in total diatom concentration occurred during the early marine isotopic stage (MIS) 4 as well as during the MIS 4/3 transition and MIS 3. Rapid changes in diatom concentrations during the MIS 3 mimics Bond cycles as independently recorded by the sea surface salinity estimation derived from planktonic foraminifera from the same core. Such patterns indicate a clear linkage between diatom production in the coastal EEP and rapid climate changes in the high-latitude North Atlantic. In parallel, the long-term succession of the diatom community from coastal diatoms, predominantly thriving during MIS 5 and 4, toward pelagic diatoms, dominant during MIS 3 and 2, points to a long-term change in the surface hydrology. During Heinrich events, diatoms strongly reduced their production, probably because of enhanced stratification in the upper water column. After the last glacial maximum, diatom production and valve preservation strongly decreased in response to the advection of nutrient-depleted (H2SiO4), warmer water masses. Our high-resolution record highlights how regional climatic processes can modulate rapid changes in siliceous primary production as triggered by wind-induced local upwelling, indicating that millennial climatic variability can overtake other prominent hydrological processes such as those related to silicic acid leakage.