Sebastian Cabot, sailing for Charles I of Spain, explored the La Plata, Paraná, and Paraguay rivers on his voyage of 1525-30. In 1536 a Spanish colony was established at Buenos Aires. Juan de Ayolas was sent on an expedition upriver, and in 1537 his party built a fort, Asunción, at the juncture of the Paraguay and Pilcomayo rivers. When Ayolas was killed by Indians, Domingo Martínez de Irala took charge, and soon moved the remnants of the Buenos Aires settlement to Asunción.
Álvar Núñez Cabeza de Vaca arrived in 1542 to serve as royal governor, but the settlers expelled him in 1544 and elected Irala governor. Asunción, situated in fertile territory, became a primary center of Spanish settlement. From here Spanish authority was extended back downriver. Since no precious metals or gems were discovered in the region, however, it was largely ignored by Spain.
In the 17th century, the Jesuits settled the Guaraní Indians in self-sufficient communities called reducciones, and protected them from exploitation by the colonists, who wished to enslave them. Angered by what they felt was undue Jesuit influence in colonial affairs, and deprived of trade and laborers, many Paraguayan colonists rose in revolt in 1721 and established an autonomous commune. The Comuneros, as the revolutionists were called, were not completely suppressed until 1735. In 1767, however, the Jesuits were expelled from the Spanish colonies by Charles III of Spain, who resented their power, and the Indians became available to the colonists as workers.
The Viceroyalty of La Plata, in which Paraguay was included with Argentina, declared itself a republic in 1810. Paraguay, however, resisted Argentinian domination, and established its own government in 1811. José Gaspar Rodríguez de Francia made himself dictator in 1814. To consolidate his rule and counter what he feared were dangerous influences from Paraguay's larger neighbors, he built a strong army and isolated the country from all foreign contact.
Francia was succeeded in 1840 by Carlos Antonio López, who had himself elected president in 1844. Under his rule river ports were opened to foreign commerce, and a program of public education was begun. Upon his death in 1862, his son, Francisco Solano López, assumed control. He was an oppressive tyrant who plundered his nation and led it to defeat in a war, 1865-70, against Argentina, Brazil, and Uruguay. Nine-tenths of Paraguay's men, including López himself, lost their lives in the conflict. After six years of postwar occupation, Paraguay fell into political turmoil that lasted into the 20th century.
By 1912 the government of Paraguay had been restored to order. A series of civilian presidents followed a program of agricultural and industrial development, land distribution, and education. Beginning in 1928, there was intermittent skirmishing with Bolivia because of a boundary dispute in the Chaco region. A truce was arranged in 1930, but a full-scale war erupted in 1932. Six American republics, including the United States, effected a truce in 1935, and the peace treaty signed in 1938 awarded about 90,000 square miles (233,100 km 2) of the Chaco to Paraguay.
The war caused political instability, and from 1936 to 1940 the country had a series of short-term dictators. A strict military dictatorship established by General Higinio Morínigo in 1940 lasted until 1948. During the next six years there were six presidents.
In 1954 the government was overthrown in a military revolt led by General Alfredo Stroessner. He set up a dictatorship that restored order and took over direction of the economy. Under his rule, there was much political repression, and Paraguay remained one of the least developed countries in South America.
Stroessner was overthrown in a military coup in 1989, and in elections held three months later, General Andrés Rodriguez Pedotti was chosen president. A new constitution was adopted in 1992, and in 1993 Juan Carlos Wasmosy was elected president, the first civilian to hold that post in nearly four decades. The military, however, remained powerful.
Vice President Luis Maria Argaña was assassinated in 1999. President Raul Cubas Grau was believed by some members of the government to have helped plot the assassination. Cubas resigned and left Paraguay. Luis González Macchi became Paraguay's president. In 2003, Nicanor Duarte Frutos won the presidential election.
A supermarket in Asunción erupted in flames in August, 2004. The fire killed more than 400 people.