In 1894, steam locomotive-hauled trains that ran along city streets in Asunción and used the same tracks as the horsecars extended service beyond Villa Morra to San Lorenzo, 20 km (12 mi) to the southeast.

Six trams were purchased from Società Italiana Ernesto Breda, in Italy, in the 1920s, and later from the American manufacturer J. G. Brill Company and in the 1930s and 1940s from Argentinian builders.

[1] The system reached its maximum extent in the 1930s, with 37 km (23 mi) of track served by 10 routes, worked by a fleet of 33 motor trams and 26 trailers.

[1] By at least 1977, tram service no longer operated on Sundays, Saturdays after midday, or during siesta (approximately noon to 2 p.m.) on any day.

[4] Fodor's Travel Guides' South America 1984 edition mentioned Asunción's "old trolleys" and called them "something preserved from the past that is interesting for youth and reminiscient for elders".

The guidebook said that, "President Stroessner is said to have vetoed plans to retire them because of their attraction for tourists and his affinity for the past.

[1] The last public tram service was discontinued around June 1995, the exact date unknown, followed by formal closure in November 1997.

[1][7] The tracks and overhead wires of route B remained usable in 1996 and 1997, and ATE operated a few "charters" (private-hire trips) for foreign railfans during that period, using the only serviceable tram, No.