Juan Monaco, a two-time finalist in Santiago, was knocked out of the first round of the Movistar Open by fellow Argentine Maximo Gonzalez 6-4, 3-6, 6-4 on Tuesday.
Gonzalez, who had lost two previous matches to Monaco, needed two hours, 45 minutes to close out this one.
Both players broke serve five times, although it was Gonzalez who came up with two of those key breaks in the final set.
Moncao was the runner-up last year and in 2008.
Top-seeded David Nalbandian had better luck, beating fellow Argentine Carlos Berlocq 6-2, 2-6, 6-2 in just under two hours.
In other first-round matches, seventh-seeded Fabio Fognini of Italy defeated Poland's Lukasz Kobot 7-6 (6), 6-2, and Horacio Zeballos of Argentina was a 7-6 (2), 6-4 winner over Brazil's Ricardo Hocevar.
Portugal's Rui Machado ousted Felipe Rios of Chile 6-2, 6-0 and Colombian Santiago Giraldo, seeded eighth, came from a set down to defeat Facundo Bagnis of Argentina 2-6, 6-3, 6-2.
Joao Souza of Brazil edged Uruguay's Pablo Cuevas 6-4, 7-5, and Brazilian Caio Zampieri progressed with a tight 7-6 (7), 7-5 win over Nicolas Massu of Chile.