Vegetation structure is a key determinant of ecosystems and ecosystem function, but paleoecological techniques to quantify it are lacking. We present a method for reconstructing leaf area index (LAI) based on light-dependent morphology of leaf epidermal cells and phytoliths derived from them. Using this proxy, we reconstruct LAI for the Cenozoic (49 million to 11 million years ago) of middle-latitude Patagonia. Our record shows that dense forests opened up by the late Eocene; open forests and shrubland habitats then fluctuated, with a brief middle-Miocene regreening period. Furthermore, endemic herbivorous mammals show accelerated tooth crown height evolution during open, yet relatively grass-free, shrubland habitat intervals. Our Patagonian LAI record provides a high-resolution, sensitive tool with which to dissect terrestrial ecosystem response to changing Southern Ocean conditions during the Cenozoic.