The Cinema of Paraguay has historically been small, however this has begun to change in recent years with films like El Toque del Oboe (1998), María Escobar (2002), O Amigo Dunor (2005) which competed for Best Movie in the Rotterdam International Film Festival, and Hamaca Paraguaya (2006), which was screened at the Cannes Film Festival, gaining critical acclaim both in Paraguay and abroad.
The first films shot in Paraguay were a series of silent shorts by Argentine director Ernesto Gunche in 1905. The first Paraguayan-made film was Hipólito Carrón's 10-minute-long silent film Alma Paraguaya, made in 1925. He went on to make a number of short documentaries with his nephew and assistant cameraman Agustín Carrón Quell. A handful of documentaries were filmed in the country over the next few decades, though most of these are now lost. The 1932 documentary En el Infierno del Chaco by the Argentine Roque Funes was the first film shot in Paraguay to use sound.
Feature-length film in Paraguay beings with 1955's Codicia, the first of several Argentine-Paraguayan co-productions the most famous of which is probably La Burrerita de Ypacaraí from 1962. The film industry in Paraguay has historically suffered from lack of funds, public interest and equipment, as well as the repressive Alfredo Stroessner government of 1954–1989. Argentine director Lucas Demare chose to film La Sed (1961), an adaptation of Paraguayan author Augusto Roa Bastos's Hijo de hombre, in Argentina because of this. The exception to this was the 1978 state-funded film Cerro Cora, directed by Guillermo Vera, which promoted the historical and political views of the Stroessner government. This was the first wholly Paraguayan-made film and was based on the events of the Paraguayan War.
Only a handful of films were made in the country during the 1980s, though some Brazilian films were partly shot in the country. 1989 saw the overthrow of Stroessner and the re-establishment of democracy. Since then the situation has slowly been improving; in 1990 the Fundación Cinemateca del Paraguay was set up and the annual Asunción Film Festival inaugurated, and several new cinemas have been built in Asunción and other Paraguayan cities. The 1994 film Miss Ameriguá gained some international interest, as did 1998's El Toque del Oboe. This has continued into the new century with films such as María Escobar (2002), Miramenometokei (2003), Hamaca Paraguaya (2006), Felipe Canasto (2010) and Semana Capital (2010). Funding remains a problem however and the market is dominated largely by American and Argentine films.