The city was founded under the name "Captain Bado" in honor of José Matías Bado, an army officer from the town of Pilar who fought in the War of the Triple Alliance, when Paraguay opposed Argentina, Uruguay and Brazil.

Located 110 km from Pedro Juan Caballero, Capitán Bado is a frontier city on the boundary between Paraguay and Brazil.

It spreads to the foot of the Cordillera del Amambay and only a street separates it from the Brazilian city of Coronel Sapucaia.

The Avenida Internacional ("International Avenue") is the border with the city of Coronel Sapucaia in Brazil.

Capitán Bado's informal economy also produces of Indian hemp or pressed marijuana, also known as "brick weed," as usual in the province of Amambay, which accounts for 75% of the total 5,000 hectares of plantation land in Paraguay.