The participation of Paraguay in the OTI Festival began at the seventh OTI Festival in 1978. The Paraguayan participating broadcaster was , which was member of the (OTI). After its debut, it participated for twenty-one editions, only missing the 1982 festival. Its best result in the festival was second achieved in 1988; and it hosted the event in 1995.
Just like most of the participating in the OTI Festival, selected all its entries internally. Its first entry in the festival was "" by veteran Rolando Percy, who got a disappointing 18th place with zero points. The same singer would return to the event in 1990 and 1995 with disappointing placings. The Paraguayan participation in the festival was not very successful, but in 1981, it reached the top 10 for first time with "" by Alberto de Luque which placed 8th.
After a withdrawal in 1982, the next year it recorded one of its most successful entries with "" by the folk singer Marco de Brix which placed fourth. The same singer, five years later, returned to the event in 1988 with his song "" which was even more successful than his previous entry achieving second place with 25 points. Since then, it never managed to reach the top 10 again.