Temuco and Pudahuel are two urban areas in Chile that are among the highest in particulate matter (PM10) air pollution in Chile. In fact, Temuco is also classified as one of the most polluted cities in Latin America by the World Health Organization. Both cities show important differences in the sources of this PM10 pollution. For Temuco, a southern city, the main source is the residential wood combustion (RWC), and for Pudahuel, located in the central zone, the main sources are mobile and point sources. The relationship between PM10 air pollution and health effects measured as the daily number of deaths and hospital admissions for cardiovascular and respiratory causes was determined. The Air Pollution Health Effects European Approach (APHEA-2) protocol was followed, and a multivariate Poisson regression model with gam.exact algorithm was fitted for these cities during 2001–2006. The results show that PM10 had a significant association with daily mortality, where the relative risks (RR) for cardio respiratory mortality of the elderly age group was 1.0126 [95% (CI: 1.0004–1.0250)] at Temuco and 1.0086 [95% (CI: 1.0007–1.0165)] for Pudahuel when PM10 increased by 10 µg/m3. For the hospital admissions due to chronic obstructive pulmonary disease (COPD), the RR were 1.0198 [95% (CI: 1.0030–1.0369)] at Temuco and 1.0097 [95% (CI: 1.0000–1.0204)] at Pudahuel. There is evidence in these cities of positive relationships between ambient particulate levels and the rates of mortality and morbidity for cardiovascular and respiratory causes; being the excess risk 47% and 104.1% higher in Temuco than Pudahuel for cardiorespiratory mortality of the elderly population and COPD hospital admissions, respectively. These results demonstrate that there is greater risk when people are exposed to air polluted with wood smoke.