Guaraní’s survival in the heart of South America is a long story that is intimately woven with the historical experience of Paraguay itself. I answered this question a while back, so I’ll use a lot of that answer here.

First, modern Paraguayan Guaraní is a recent creation that grew out of the colonial cultural exchange starting in the 1500s. As the Spanish arrived in the Río de la Plata region, they quickly settled in Paraguay. Once this happened, the language of both the colonizers and the colonized began to change. The two languages mixed together in Spanish and indigenous settlements. Depending on who was interacting, speakers either spoke predominantly Castellano with key Guaraní words mixed in or Guaraní with some Castellano mixed in. Over time, it became a mixed language that facilitated communication between various interacting parties.

Meanwhile, the famous Jesuit missions of Paraguay concentrated together hundreds of thousands of indigenous people for centuries in religious and economic communities. Though they have always been controversial (historians like Branislava Susnik and Philip Caraman demonstrated that the missions were often brutal places), more recent historians like Barbara Ganson and James Schofield Saeger have shown that the missions allowed indigenous people a large amount of freedom to preserve their culture and protect their interests.

In the beginning, the Jesuits tried to use Spanish, but this was abandoned in favor of Guaraní, since the semi-settled populations spoke several dialects of the language that were mutually intelligible. Cajetan Cattaneo, an Italian Jesuit in a letter to his brother in 1730, explained his experience with the language: “The only thing that gave me some pain, was the difficulty of the language. I have applied myself so assiduously to it that these two months I have catechized the children...Tho’ I now and then mistake one word for another, I find they understand me pretty well, as I do them by their answers. Those that answer best, I reward with pictures, and dismiss all my people well satisfied.” Cattaneo shows that the language provided the Jesuits with a medium of communication through which they could spread the gospel. It also allowed them to quickly teach European values and agricultural methods. All of these were central to Spanish goals throughout the New World. As historian Lyman Johnson points out, Guaraní language became centrally important to trade in the region and allowed various individuals from all over South America to communicate. Eventually, to counter the growing threat of Brazilian slavers who were preying on the missions, the Jesuits organized Guaraní military forces, who spoke their native language, further protecting and fostering a sense of cultural and linguistic identity. Additionally, Guaranís who objected to life in the missions or in the colonial world could flee, finding communities of unincorporated natives deep in the rugged and forested terrain of central South America. Here too, the language survived largely outside of Spanish or Portuguese control.

For the most part though, Paraguay remained on the fringes of the two major empires. Lacking substantial, exploitable natural resources, the region and its indigenous inhabitants were (relatively) spared from the levels of involvement seen in other regions of the New World. Far fewer immigrants came to the region, and thus, Spanish speakers remained a significant minority. In 1750, there were roughly 150,000 Guaraní in the missions alone, while the Spanish and mestizo population combined hovered around 30,000. Those that spoke Castellano often took Guaraní wives and mistresses, further increasing the population of Guaraní speakers who would have been raised by the mother. Following 1767, the Guaraní exited the missions en masse, allowing the language to diffuse throughout the Río de la Plata. In this way, Guaraní spread, slowly incorporating more Spanish elements like grammar and writing, but maintaining its overall integrity. The language took different forms, either the very esoteric, figurative religious language that the Jesuits introduced, or a more simplified, hybridized language of the common people. The simplified style flourished as traders, Spanish citizens, and Guaraní residents interacted with one another. Over time, the language became more and more hybridized. The Spanish elite tried to stop it and often vilified it, but their attempts made virtually no difference.

Following independence, Paraguay famously shut itself off from the world, pursuing a policy of nationalistic self-sufficiency. The education system and the government throughout the 1800s emphasized Castellano, but Guaraní remained the language of the pueblo. The elite and foreigners looked down upon the language, as an element of barbarity that held the country back. Schools, the government, the archives, and the theater all fostered Castellano, but these institutions made few inroads into the countryside where the language remained deeply ingrained. During the Paraguayan War, the language was widely spoken between soldiers and officers. Most of the male population perished during the war, leaving behind a society of mostly rural, uneducated women, who spoke almost exclusively Guaraní. When peace came, a large number of Paraguayan elite who had fought against Paraguay during the war took power, supported by the Allies. They took control of the government and the educational system, and once again, Guaraní fell from favor. To them, the language prevented progress and was a symbol of the backwardness of the people. Entering the twentieth century, the language remained marginalized to the campo.

But during the Chaco War, Guaraní again was used by the military. During the conflict, Guaraní took on more nationalistic and artistic forms that had previously been discouraged. Unlike previous times, these expressions were not set aside after the war ended. Pride in indigenous and working class heritage thrived, eventually helping the language be recognized as a national language in the 1960s and an official language in 1992. The language we know today though is very different from the one spoken by the original inhabitants of Paraguay. It is simpler and mixed, but it managed to remain the language of the people for centuries. Today, Guaraní is spoken by over 90% of Paraguayan citizens with varying levels of fluency.