Chile’s parties have been characterized as ‘European’ in their development and institutionalization, but ‘Latin American’ in their high degree of political localism. Yet the specialized literature has not tested these tendencies nor developed a theory as to how they may coexist. Using the concept of party nationalization, we establish the veracity of the claims in the literature and propose a theory of static and dynamic nationalization development. We show that, as in Western European systems, Chile’s political parties exhibited progressive static nationalization until 1973. Since re-democratization, parties have demonstrated low levels of static nationalization, while the coalitions are highly nationalized. Concurrently, both parties and the coalitions have exhibited low levels of dynamic nationalization like parties throughout Latin America. We argue that these conflicting patterns are due to the interactive effect of functional cleavages and electoral institutions.