Context: It is known that for solar-mass stars planet formation begins in a circumstellar disc. The study of transitional objects exhibiting clear signs of evolution in their discs, such as the growth of dust particles and beginning of disc dispersal, is fundamental to understanding the processes governing dust-grain coagulation and the onset of planet formation. Aims: We attempt to characterise the physical properties of T Chamaeleontis, a transitional T Tauri star showing UX Ori-type variability, and of its associated disc, and probe the possible effects of disc-clearing processes. Methods: Different spectral diagnostics were examined, based on a rich collection of optical high- and low-resolution spectra. The cross-correlation technique was used to determine radial and projected rotational velocities, shape changes of photospheric lines were analysed via bisector-method applied to the cross-correlation profile, and the equivalent widths of both the Li i λ6708 Å photospheric absorption and the most prominent emission lines (e.g., Hα, Hβ and [Oi] 6300 Å) were measured. Variability in the main emission features was inspected by means of line-profile correlation matrices. Available optical and near-infrared photometry combined with infrared data from public catalogues was used to construct the spectral energy distribution (SED) and infer basic stellar and disc properties. Results: Remarkable variability on timescale of days in the main emission lines, Hα changing from pure emission to nearly photospheric absorption, is correlated with variations in visual extinction of over three magnitudes, while the photospheric absorption spectrum shows no major changes. The strength of emission in Hα and Hβ is highly variable and well correlated with that of the [Oi] lines. The structure of the Hα line-profile also varies on a daily time-span, while the absence of continuum veiling suggests very low or no mass accretion. Variations of up to nearly 10 km s-1 in the radial velocity of the star are measured on analogous timescales, but with no apparent periodicity. SED modelling confirms the existence of a gap in the disc. Conclusions: Variable circumstellar extinction is inferred to be responsible for the conspicuous variations observed in the stellar continuum flux and for concomitant changes in the emission features by contrast effect. Clumpy structures, incorporating large dust grains and orbiting the star within a few tenths of AU, obscure episodically the star and, eventually, part of the inner circumstellar zone, while the bulk of the hydrogen-line emitting-zone and outer low-density wind region traced by the [Oi] remain unaffected. In agreement with this scenario, the detected radial velocity changes are also explainable in terms of clumpy material transiting and partially obscuring the star. Based on observations obtained at the European Southern Observatory at La Silla, Chile in program 63.I-0045(A); 65.I-0089(A); 66.C-0616(A); 67.C-0155(A); 67.C-0155(B); 68.C-0292(A); 69.C-0207(A); 70.C-0163(A); 073.C-0355(A); 074.A-9018(A); 075.C-0399(A-F). Tables 1, 2 and 4, and Figs. 21-32 are only available in electronic form via http://www.aanda.org