This study investigates synthetic aperture radar (SAR) time series of the Sentinel-1 mission acquired over the Atacama Desert, Chile, between March 2015 and December 2018. The contribution analyzes temporal and spatial variations of Sentinel-1 interferometric SAR (InSAR) coherence and exemplarily illustrates factors that are responsible for observed signal differences. The analyses are based on long temporal baselines (365–1090 days) and temporally dense time series constructed with short temporal baselines (12–24 days). Results are compared to multispectral data of Sentinel-2, morphometric features of the digital elevation model (DEM) TanDEM-X WorldDEM™, and to a detailed governmental geographic information system (GIS) dataset of the local hydrography. Sentinel-1 datasets are suited for generating extensive, nearly seamless InSAR coherence mosaics covering the entire Atacama Desert (>450 × 1100 km) at a spatial resolution of 20 × 20 meter per pixel. Temporal baselines over several years lead only to very minor decorrelation, indicating a very high signal stability of C-Band in this region, especially in the hyperarid uplands between the Coastal Cordillera and the Central Depression. Signal decorrelation was associated with certain types of surface cover (e.g., water or aeolian deposits) or with actual surface dynamics (e.g., anthropogenic disturbance (mining) or fluvial activity and overland flow). Strong rainfall events and fluvial activity in the periods 2015 to 2016 and 2017 to 2018 caused spatial patterns with significant signal decorrelation; observed linear coherence anomalies matched the reference channel network and indicated actual episodic and sporadic discharge events. In the period 2015–2016, area-wide loss of coherence appeared as strip-like patterns of more than 80 km length that matched the prevailing wind direction. These anomalies, and others observed in that period and in the period 2017–2018, were interpreted to be caused by overland flow of high magnitude, as their spatial location matched well with documented heavy rainfall events that showed cumulative precipitation amounts of more than 20 mm.