The megatherioid sloths from the Santa Cruz Formation (Santacrucian Age; early-middle Miocene, Patagonia, southernmost South America) occupy basal positions in the most recent phylogenetic schemes. The cranial morphology of Eucholaeops, particularly of the teeth, suggests interesting functional features that shed light on the type of food it was capable of processing, and thus on the diet. A detailed morphofunctional analysis of the jaw apparatus was performed, and the results briefly compared with other contemporary megatherioid sloths. Comprehensive descriptions of the teeth of Eucholaeops allow us to generate a nomenclature for describing the inferred occlusal pattern analogous to that applied to other mammals. Based on examination and mapping of occlusal wear facets, we reconstruct two distinct jaw movements during the power stroke. One corresponds to the basic therian pattern equivalent to Phase I: the working side mandibular corpus is moved dorsally, mainly orthally but also anteriorly and slightly medially; the result is puncturing, tearing and shearing of food. The second is a distinct and unrelated movement of the working side corpus dorsally, mainly orthally, but also posteriorly and slightly medially; the dominant result is to produce shearing of food. The analysis of the tooth wear facets, combined with the shape of the temporomandibular joint, the presence of a fused mandibular symphysis, and a well-developed temporalis muscle, indicates that the orthal component was predominant during mastication. Eucholaeops, and probably nearly all other Miocene megatherioids, were most likely leaf eaters and the primary method of food reduction must have been by shearing or cutting.