Local knowledge and values of coastal communities offer insights into the intricate human-nature relationships in the land-sea interface. Considering a diversity of values unveils how people perceive nature, encompassing both tangible and intangible dimensions, and this understanding is part of how they navigate dynamic environmental challenges by embracing livelihood diversification spanning land-sea activities. Better understanding of these values, relationships and diversification strategies can improve social-ecological systems theory and practice. Here we assess links between local knowledge, values and livelihoods in order to identify emerging tradeoffs. Using semi-structured interviews with qualitative and quantitative methods, we conducted a total of 88 interviews in five communities in Southern Chile. Local knowledge and values were collected as free-listing on terrestrial and marine species. We probed relationships between livelihood diversification and values, classified as relational, intrinsic, and instrumental. Our findings showed that marine species were most associated with instrumental values, while terrestrial species had a balance between relational, intrinsic and instrumental values. We observed that as communities expand their livelihoods and live closer to the city, they showed lower knowledge and values, and in these cases instrumental values predominate. Certain diversification strategies could lead to time constraints, impacting the transmission of knowledge and resulting in less values. Deeper and long-term cooperation between different actors to recover and protect different values is necessary to couple local knowledge and values with livelihood diversification. Our research provides valuable insights for policymakers aiming to develop holistic strategies that include relational values and leverage diverse knowledge systems to address contemporary environmental challenges.