It has distinct differences from standard Chilean Spanish in accent, pronunciation, grammar and vocabulary, especially by influences from local dialect of Mapuche language (called huilliche or veliche) and some conservative traits.
After the battle of Curalaba (1598) and the Destruction of the Seven Cities Chiloé was further isolated from the rest of Chile and developed a culture with little influence from Spain or mainland Chile.
During the 17th and 18th centuries most of the archipelago's population was bilingual and according to John Byron many Spaniards preferred to use Mapudungun because they considered it more beautiful.
[1] Around the same time, Governor Narciso de Santa María complained that Spanish settlers in the islands could not speak Spanish properly, but could speak Veliche, and that this second language was more used.
[2] The Spanish of the Chiloé Archipelago shares a number of morphological characteristics with that of northern New Mexico and southern Colorado and with that of rural areas of the Mexican states of Chihuahua, Durango, Sonora, Tlaxcala, Jalisco, and Guanajuato:[3]