Antolin Alcaraz got on the end of a Aureliano Torres dead ball, out-jumped Fabio Cannavaro to head Paraguay ahead of Italy in the 38th minute in Cape Town.
Paraguay had played conservatively throughout the half and, aside some a small stretch in the middle of the half, seemed content to absorb the Italian attack.
But a free kick won 35 yards from goal allowed midfielder Aureliano Torres to place a beautiful ball near the spot. Central defender Antolin Alcaraz rose over Cannvaro to head the ball back across goal, giving Gianluigi Buffon no change.
On a rain-soaked pitch in Cape Town, Paraguay leads 1-0 after 38 minutes.