The anarchist movement in Chile emerged from European immigrants, followers of Mikhail Bakunin affiliated with the International Workingmen's Association, who contacted Manuel Chinchilla, a Spaniard living in Iquique. Their influence could be perceived at first within the labour unions of typographers, painters, builders and sailors. During the first decades of the 20th century, anarchism had a significant influence on the labour movement and intellectual circles of Chile. Some of the most prominent Chilean anarchists were: the poet Carlos Pezoa Véliz, the professor Dr. Juan Gandulfo, the syndicalist workers Luis Olea, Magno Espinoza, Alejandro Escobar y Carballo, Ángela Muñoz Arancibia, Juan Chamorro, Armando Triviño and Ernesto Miranda, the teacher Flora Sanhueza, and the writers José Domingo Gómez Rojas, Fernando Santiván, José Santos González Vera and Manuel Rojas. At the moment, anarchist groups are experiencing a comeback in Chile through various student collectives, affinity groups, community and cultural centres, and squatting.

During the French Revolution of 1848, a number of Chilean radicals visited Paris, where they became acquainted with the mutualism of Pierre-Joseph Proudhon and the Christian socialism of Félicité de La Mennais. Upon their return to Chile in 1850, Francisco Bilbao and Santiago Arcos established the Equality Society (Spanish: Sociedad de la Igualidad, SI), a mutual aid society which was suppressed before the end of the year by the Chilean authorities. Other mutualist societies were founded throughout the 1850s, culminating in 1862 with the formation of The Union (Spanish: La Union), which became highly influential among artisans in many Chilean cities, providing free health care and organising workshops for the unemployed. The mutualist movement quickly formed a counterculture in Chile, believing that capitalism could be replaced peacefully through institutions of dual power.

Anarchist propaganda began circulating in Chile around 1880, consisting of literary works arriving from Spain and Argentina. The first libertarian newspaper, El Oprimido, was published in 1893 in Valparaíso, followed by others such as: El Ácrata, La Luz, La Revuelta, La Batalla, El Surco, Acción Directa and others. La Batalla was published continually for a longer period of time, between 1912 and 1926. There were also various newspapers published by general unions with anarchist tendencies, such as: El Siglo XX, La Imprenta (typographers) and El Marítimo in Antofagasta (sailors).

As far as anarchist literature was concerned, the publishing house Editorial Lux distinguished itself by printing books by Chilean and European anarchists such as Manuel Márquez and José Domingo Gómez Rojas. Among other notable militants were the typographer Enrique Arenas from Iquique, founder of a number of anarchist newspapers, as well as Luis Olea, Alejandro Magno Espinosa and Alejandro Escobar y Carballo, the driving force behind several general unions.

General unions engaged in conflict with the older and newer benefit societies, which had been in existence since the mid-nineteenth century, and which they considered incapable of defending the interests of the working class. The newspaper El Faro criticised the old benefit societies, branding them as "the mutualist mummies that have been eternally vegetating without any sort of practical profit, or the economical development of which they should be responsible as the developers of all kinds of social wealth". The newspaper Siglo XX had a similar position on the matter: "It is essential within these societies to assure the payment of the quotas of their members, with no care whatsoever given to whether the individual actually has the resources to meet them or not (...) These societies are powerless in defending the privileges and the interests of the proletariat".

This context of a growing working-class movement set the basis for the emergence of co-operatives, which adopted a strictly defensive position despite their anarcho-syndicalist inspiration. The first co-operative was founded by dockworkers in Iquique on 1 May 1900, and later ones emerged in Antofagasta, Chañaral and Copiapó. In 1904 the first National Convention of Co-operatives was organised in Santiago, with the participation of 20 000 members from 15 organisations. The defensive character of these organisations meant that most co-operatives were under the control of socialists and Marxists, particularly members of the Democrat Party. Many of these went on to form the Workers' Federation of Chile (FOCH).

One of the first conflicts triggered by the anarchists was "the Great Boatmen Strike" of 1890, which took place in Iquique, Antofagasta, Valparaíso, Concepción and other smaller ports. A strike broke out in Valparaíso in 1903 at the South American Steamboat Company (CSV), which was suppressed violently, causing the workers to react by setting fire to the company's headquarters.

In 1905, a spontaneous workers' movement took place in Santiago, encouraged by the anarchists. It came to be known as the Red Week. The movement started as a consequence of an unjustified repression by the police of a rally protesting against taxes on imported meat. The fierce repression and clashes with the police resulted in the deaths of around 200 workers. The indignation of the workers grew stronger and stronger, and most of the labour unions went on general strike. The government declared a state of siege and called upon the army to suppress the movement. The crowds attempted to take over the governmental palace, and even though they did not succeed, the city remained under their control.