Caaguazú (Spanish pronunciation: [ka(a)ɣwaˈsu]) is a district and city in the department of the same name in Paraguay.

The area was originally called ´Picadas de Ka´aguasu´ which means ´the clearings of the big forest.´ These lands were acquired by a man named Cristobal Villalba from Villarrica through a royal land grant in 1706 and in 1762 they were inherited by his son named Sebastian.

[1] During the dictatorship of Gaspar de Francia, since 1820, the benefits of yerba mate grew within the population.

Four years later this farmstead would be organized as Guardia del Empalado by the president Carlos Antonio Lopez.

They opened a school that same year and in 1852 the local priest Ignacio Gauto build the first chapel with the help of the neighbors.