A massive beaching and mortality of fishes occurred in Coliumo Bay, a shallow bay located along the coast of the eastern South Pacific Ocean on 3 January 2008. This stranding was a consequence of an abrupt decrease in the dissolved oxygen concentration throughout the whole water column, due to the effect of intense upwelling along the coast off central-southern Chile. The main objectives of this study were: (1) to characterize taxonomically and biologically the fish species assemblage present in this beaching; (2) to evaluate several physiological indicators for the condition of the beached species at the time of their death; and (3) to assess the possible cause–effect mechanisms involved in the fishes death and the changes that took place in the fish community throughout the time. In this beaching, 26 fish species were identified: 23 teleosts, one myxiniform and two elasmobranchs. Most beached specimens were juveniles. Haematological and histological evidence indicate that severe hypoxia that lasted for at least 48 h was the most plausible cause of death. The main conclusion of this study is that the presence of oxygen-poor equatorial sub-surface water in the shallow coastal zone due to intense regional-scale upwelling caused the fish stranding. Although the effect of the hypoxic event was severe for the fish assemblage of Coliumo Bay, the rapid recuperation observed suggests that hypoxic events at the local spatial scale can be buffered by migration processes from the fish community inhabiting close by areas non-affected by low oxygen conditions. The effect that severe hypoxic events may have on larger spatial scales remains unknown.