The original plan was that the first column, commanded by Wenceslao Robles, would seize the town of Corrientes while a second column of 12,000 men, commanded by Antonio de la Cruz Estigarribia, would then advance to the east of Corrientes and capture Brazilian possessions on the Uruguay River.

The other column would then capture Corrientes, distracting Argentine forces and creating a lifeline between Paraguay and the Atlantic Ocean.

This plan was later revised so that two-thirds of the assault force would attack Corrientes and later divert southeast and invade Uruguay.

Following the successful capture of Corrientes by the Paraguayans, Argentine general Wenceslao Paunero launched a daring attack – on 25 May – that recaptured the city.

However, given the numerical superiority of the Paraguayans, Paunero chose to evacuate the city and its civilians two days later and head to the southwest of the province.

[2]: 31 Argentine president Bartolomé Mitre put general Justo José de Urquiza, governor of the province of Entre Ríos, in charge of facing the Paraguayan column.

Other attempts by the Paraguayan columns to communicate were frustrated in July near Salto by lieutenant Floriano Peixoto's forces.

[6] On 5 May, after invading the northwest of the province of Corrientes, General Estigarribia sent colonel Pedro Duarte in front of a small advance column to control the bank of the Uruguay River.

In the meantime, Estigarribia's column was attacked and partially destroyed on the outskirts of São Borja, in the battle of Butuí.

On June 4 the troops of Urquiza, who refused to fight the Paraguayans on the grounds of being considered allies against Brazil (which Argentina had frayed relations with), were disbanded.

Uruguayan president and general Venancio Flores, fresh from his triumph over the Blanco party, marched to join Urquiza with 2,750 men.

In addition, the Brazilian forces, commanded by lieutenant colonel Joaquim Rodrigues Coelho Nelly, numbering 1,200 men, were heading their way.

Duarte moved away from Paso de los Libres and took positions on the banks of the Yatay stream, near the village.

The battle began at 10:00 am, with an early attack on the Paraguayan positions by the infantry division commanded by León de Pallejas.