This article chronicles the fifteen-month border conflict between the military regimes of Brazil and Paraguay that occurred between March of 1965 and June of 1966 – a stand-off that paved the way for the Itaipu project that would become the largest dam in the world. In the context of the 1960s Cold War, both governments saw a large-scale dam on the Paraná River as a means to catalyse industrialisation and strengthen the political legitimacy of their respective authoritarian regimes. Yet the border crisis was not a stand-off between equal powers. Brazil was the much stronger force, and, with the backing of the United States, the Brazilian dictatorship brought Paraguay firmly under its sphere of influence while also marginalising neighbouring Argentina. The border question at Guaíra served as a springboard for Brazil's rising power, and subsequently transformed the geopolitical landscape of the Southern Cone.
