The Americans' coach, Kazbek Tambi, had reacted to the shock 3-2 defeat to Japan by making seven changes to his starting line-up, and his new-look team should have taken the lead after 15 minutes, when Lexi Harris side-footed wide from all of five yards.
Paraguay, outclassed by France in their opener, had been expected to find themselves on the receiving end of another heavy defeat, but with 32 minutes played they took a surprise lead, Gloria Villamayor showing great skill to wriggle her way to the byline and set up Rebeca Fernandez for a clinical low finish.
The South Americans seemed to grow in confidence after the goal and it took a double calamity two minutes into the second half to bring the US level. First, Paraguay's goalkeeper Zulma Orue failed to gather as she slid out, and then, with Elizabeth Eddy's cross-cum-shot drifting harmlessly across the unguarded goal, defender Cris Mabuel Flores' attempts to control the ball on her thigh only resulted in her putting through her own goal.
Tambi had brought on his regular strike pairing of Courtney Verloo and Vicki DiMartino in a double half-time substitution, and both made a goalscoring impact to wrap up the points. Di Martino struck first, springing the offside trap and coolly slotting past Orue for her second New Zealand 2008 goal, and Verloo rounded off the scoring with a superb shot that flashed into the roof of the net from 25 yards.