The decision to hold a second consecutive tournament in Europe (after Italy in 1934) caused outrage in South America, where it was believed that the venue should alternate between the two continents.

Because of anger over the decision to hold a second successive World Cup in Europe, Uruguay, Argentina, United States and Mexico refused to enter the competition.

As a result, only three non-European nations took part: Brazil, Cuba and Dutch East Indies (Indonesia), the latter being the first Asian country to participate in a FIFA World Cup.

[1] This is the smallest ever number of teams from outside the host continent to compete at a FIFA World Cup.

Germany, France, Italy, Czechoslovakia, Hungary, Cuba and Brazil were seeded for the draw taking place in Paris, on 5 March 1938.

[5] Sweden advanced directly to the quarter-finals as a result of Austria's withdrawal, and they proceeded to beat Cuba 8–0.

Czechoslovakia took Brazil to extra time in a notoriously feisty match in Bordeaux before succumbing in a replay; the South Americans proved too strong for the depleted Czechoslovak side (both Oldřich Nejedlý and František Plánička had suffered broken bones in the first game) and won 2–1.

Hungary destroyed Sweden in one of the semi-finals 5–1, while Italy and Brazil had the first of their many important World Cup clashes in the other.

However, no record remains of such a telegram, and World Cup player Pietro Rava said, when interviewed in 2001, "No, no, no, that's not true.

With the final score favouring the Italians 4–2, Italy became the first team to successfully defend the title and were once more crowned World Cup winners.

The Italian Vice-president of FIFA, Dr. Ottorino Barassi, hid the trophy in a shoe-box under his bed throughout the Second World War and thus saved it from falling into the hands of occupying troops.

In 1986, FIFA published a report that ranked all teams in each World Cup up to and including 1986, based on progress in the competition, overall results and quality of the opposition.