Paraguayan theater was born with a strong Spanish influence, following in the footsteps of the first stagings of theatrical pieces brought from Spain, from religious allegorical plays and operettas. This influence continued through the golden age of Spanish comedies and zarzuelas, or classic peninsular operettas, up to the beginning of the 20th Century, in some cases with the arrival of theatrical troops from Spain.

Creation of the National Theater is attributed to Ildefonso Antonio Bermejo, through the construction of a theater, the formation of a cast and the contracting of foreign theater companies, with the sponsorship of president Carlos Antonio López, in the second half of the 19th Century.

Paraguayan theater began to show clear signs of identity in the first decades of the 20th Century, with some figures that gave a strong boost to this form of expression, such as Josefina Plá, Roque Centurión Miranda, Fernando Oca del Valle, Manuel Ortiz Guerrero and Julio Correa, the last of which was one of the creators of Theater in Guaraní.  In 1940 the Paraguayan Comedic Company and the Athenæum Company were formed, and in 1948, the Municipal School for the Performing Arts.

Some of the most prolific playwrights born to Paraguay belonged to this generation; among them are Mario Halley Mora, José María Rivarola Matto, Arturo Alsina and Josefina Plá. 

Folk theater had a noteworthy flowering in the decades of the 30s, 40s and 50s of the 20th Century, with renowned casts like those of Julio Correa, Ernesto Báez-Emigdia Reisófer and Roque Sánchez-Graciela Pastor.  Los Compadres, a comedic duo made up of César Alvarez Blanco and Rafael Rojas Doria, joined this theatrical lineage, and in other genres standouts included people such as Héctor de los Ríos, Jacinto Herrera, Mario Prono and María Elena Sachero.

The 60s and 70s saw the arrival of the Independent Theater, which renewed Paraguayan theater in subject matter and language, initiating experimental paths and innovating proposals, subject to themes of social and human importance that had not been deeply focused on prior to that time.

Theater companies of particular prominence during these years included La Farándula, or Show Business, Arlequín Theater, Vanguard Folk Theater, Timpoovillo, Aty Ñe’e and Free Study Theater.

Among the more recently formed casts are the cast from the Center for Theatrical Research and Dissemination, directed by Agustín Núñez, an important figure in contemporary Paraguayan theater, who directed the stage implementation for the soap opera “Yo El Supremo” by Augusto Roa Bastos, one of the most spectacular and  most acclaimed montages ever achieved in the country in recent decades.

Other important directors of modern Paraguayan theater include José Luis Ardissone, Miguel Gómez, Raquel Rojas, Tito Chamorro, Maluli Vera and Wal Mayans.