It initially ruled the country from 1887 until 1904. In 1946, it rejoined the government, together with the Febreristas, during Higinio Moríñigo's rule as President of Paraguay.
From 1947 until 1962, the Colorado Party ruled Paraguay as a one-party state; all other political parties were illegal. In 1962, all national parties were nominally legalized; the Communist Party being deemed "international" remained illegal and its adherents repressed by the Paraguayan state.
In practice, however, Paraguay remained a one-party military dictatorship until the overthrow of longtime president Alfredo Stroessner in 1989. It served as one of the "twin pillars" of Stroessner's 35-year rule, one of the longest in history by a non-royal leader.
In 2002 the National Union of Ethical Citizens split from the party.
At the legislative elections of April 27, 2003, the party won 35.3% of the popular vote (37 out of 80 seats) in the Chamber of Deputies of Paraguay and 32.9% (16 out of 45 seats) in the Senate. Its candidate at the presidential elections on the same day, Nicanor Duarte, won 37.1% of the popular vote and was elected President of Paraguay.
Originally, the Colorado Party was conservative, representing those opposed to the Liberal Party.
On April 20, 2008, for the first time in 61 years, the Colorado Party lost the presidential elections to an opposition candidate from the center-left, Fernando Lugo, a Roman Catholic bishop, a first on both accounts (free election of an opposition candidate and of a bishop to the office of president in Paraguay). The Colorado Party was represented in these elections by Blanca Ovelar, the first woman to run for the presidency. Fernando Lugo, who had resigned his bishophood and priesthood before the elections so that he could become eligible under Paraguayan law, was formally released of his vows by the Vatican before his installation as president on August 15, 2008.