The South American Youth Championship 1981 was held in Guayaquil and Quito, Ecuador.

It also served as qualification for the 1981 FIFA World Youth Championship.

The following teams entered the tournament: (Peru withdrew due to the Paquisha War)

The two best performing teams qualified directly for the 1981 FIFA World Youth Championship.

Argentina also qualified, after winning an intercontinental play-off against New Zealand and Israel.