Near-modern ecosystems were established as a result of rapid ecological adaptation and climate change in the Late Miocene. On land, Late Miocene aridification spread in tandem with expansion of open habitats including C4 grassland ecosystems. Proxy records for the central Andes spanning the Late Miocene cooling (LMC) show the reorganization of subtropical ecosystems and hydroclimate in South America between 15 and 35°S. Continental pedogenic carbonates preserved in Neogene basins record a general increase of δ18O and δ13C values from pre-LMC to post-LMC, most robustly occurring in the subtropics (25 to 30°S), suggesting aridification and a shift toward a more C4-plant-dominated ecosystem. These changes are closely tied to the enhancement of the Hadley circulation and moisture divergence away from the subtropics toward the Intertropical Convergence Zone as revealed by climate model simulations with prescribed sea-surface temperatures (SSTs) reflecting different magnitudes of LMC steepening of equator-to-pole temperature gradient and CO2 decline.