The dictatorship of Alfredo Stroessner saw brutal repression of LGBTIQ+ people, and all activism was snuffed out. A notable case was in September 1959 when 108 suspected homosexuals were taken in by authorities and interrogated after a fire broke out in Asuncion, with police blaming homosexuality and Stroessner himself encouraging hatred and violence against the LGBTIQ+ community. Several LGBTIQ+ people fled the country during this period to avoid persecution.

In 1954, Chaco passed a law criminalising "dressing as the opposite sex" in public, criminalising the gender expression of trans people. This would be repealed in 1995.

The Vagrants and Common Delinquents Law (Ley de Vagos y Maleantes) was modified under the regime of Francisco Franco to prohibit homosexual acts, with a penalty of imprisonment. In 1970 the Law on Danger and Social Rehabilitation (Ley Sobre Peligrosidad y Rehabilitación Social) was introduced that further enforced the prohibition and specified a prison term of up to 5 years.

In the 1953-54 parliamentary session, the Criminal Code was amended to also criminalize homosexuality between women. The amendment took effect in the summer of 1954.

Since at least the "Customs/Personal Law/Special Marriage Act, 1954" marriage has been referred to as between a man and a woman. Several laws since have also done this.

Between 1954 and 2005 homosexuality was considered a mental disorder and gay men were prohibited from serving.