Caraguatay (Spanish pronunciation: [kaɾaɣwaˈtaj]), Guaraní: Karaguatay) is a distrito and town located in the Vapor Cué region of the Cordillera Department in Paraguay.

[citation needed] A Spanish family Franco founded the city on 24 September 1770, during the governorate of Carlos Morphi, on the banks of Yhaguy River.

Close to the city centre and beside the Yhaguy River is the "Vapor Cué National Park", an open-air museum, where the remains of six ships of the Paraguayan forces that participated in the War of 1870 are exhibited.

The ships, Anhambay, Paraná, Pirabebé/Piravevé, Rio Apa, Salto del Guairá and Yporá, were set on fire and sunk towards the end of that war, to deny them to the enemy.

Beginning in 1978, their remains were recovered and are now displayed, partly restored, alongside other objects, flags and photographs from their time.