In the temperate forests of the southern Andes, Nothofagus pumilio, the dominant species of the most extensive forest type, experiences severe defoliation caused by caterpillars of the Ormiscodes genus (Lepidoptera: Saturniidae). This study uses tree rings to reconstruct the history of Ormiscodes outbreaks for the 1850–2005 period and examines relationships between outbreaks and climate variability. We used local climate records to compare outbreak–climate relationships in the northern Patagonian Andes (c. 41°S) and the cooler southern Patagonian Andes (c. 49°S). We also examined relationships between outbreak events and regional climate variability driven by variability in the Southern Annular Mode (SAM) and the El Niño-Southern Oscillation. Although relationships between Ormiscodes outbreaks and climate proved to be complex, in northern Patagonia defoliation events are associated with drier and warmer than average growing seasons. Warming and drying trends in Patagonia during the latter part of the 20th century have been linked to a positive trend in SAM. During the post-1976 period of accelerated warming in Patagonia, widespread defoliation outbreaks have occurred in both northern and southern Patagonia but the increase in frequency of events has been greater in the south. In southern Patagonia the increases in frequency of outbreaks in the late 20th century appear to be unprecedented over the c. 150 year tree-ring record of reconstructed outbreaks. These results are consistent with the greater magnitude of recent warming in southern Patagonia, and suggest that under predicted warmer and drier climates in the 21st century, defoliator outbreaks may continue to increase in frequency. This study is the first systematic reconstruction of past insect outbreaks in South America and provides a preliminary understanding of how climate variability affects defoliator outbreaks in Patagonian Nothofagus forests.