This paper addresses the heterogonous effects of adverse liquidity shocks on corporate cash holdings in an emerging market. We use a large panel dataset with quarterly financial information for Chilean firms during the period 19962009. We find three main results. First, liquidity crises have had a negative and economically significant effect on cash holdings, but mainly for small firms; medium-sized and large firms have not been affected by liquidity crises. Second, liquidity crises reduce the ability of firms to adjust to optimal cash holdings. Finally, medium-sized firms are less able to adjust cash holdings compared to small and large firms.