Barrios was named in a 30-man squad that will be cut to 23 at the end of the month, in time for the start of the finals on 11 June.
"Nobody can doubt the capabilities of Lucas Barrios," Martino, himself an Argentine, told a press conference. Barrios, whose mother is Paraguayan, has enjoyed a fine season with Dortmund, as has clubmate Nelson Haedo Valdez, who also made the 30 along with fellow strikers Oscar Cardozo of Benfica and Manchester City's Roque Santa Cruz.
"I can imagine Paraguay causing some surprises in South Africa," said Barrios, who has scored 18 goals in the Bundesliga this season.
There was no place in the squad for Club America forward Salvador Cabanas, who was shot in the head in a Mexico City bar last January. Cabanas was Paraguay's top scorer in the qualifiers with six goals but despite his omission, officials last month said he was "95 percent recovered" from his injury.
Paraguay will face reigning champions Italy, New Zealand and Slovakia in Group F of South Africa 2010.
Goalkeepers: Justo Villar (Valladolid/ESP), Aldo Bobadilla (Deportivo Independiente de Medellin/COL), Diego Barreto (Cerro Porteno)
Defenders: Claudio Morel Rodriguez (Boca Juniors/ARG), Denis Caniza (Leon/MEX), Paulo da Silva (Sunderland/ENG), Dario Veron (Pumas UNAM/MEX), Julio Cesar Caceres (Atletico Mineiro/BRA), Julio Manzur (Tigres/ARG), Carlos Bonet (Olimpia), Aureliano Torres (San Lorenzo de Almagro/ARG), Marcos Caceres (Racing/ARG), Antolin Alcaraz (FC Bruges/BEL)
Midfielders: Edgar Barreto (Atalanta/ITA), Cristian Riveros (Cruz Azul/MEX), Osvaldo Martinez (Monterrey/MEX), Victor Caceres (Libertad), Enrique Vera (Liga Deportiva Universitaria de Quito/ECU), Jonathan Santana (Wolfsburg/GER), Sergio Aquino (Libertad), Eduardo Ledesma (Lanus/ARG), Nestor Ortigoza (Argentinos Juniors/ARG), Marcelo Estigarribia (Newell's Old Boys/ARG)
Forwards: Roque Santa Cruz (Manchester City/ENG), Nelson Haedo Valdez (Borussia Dortmund/GER), Oscar Cardozo (Benfica/POR), Edgar Benitez (Toluca/MEX), Lucas Barrios (Borussia Dortmund/GER), Rodolfo Gamarra (Libertad), Jorge Achucarro (Newell's Old Boys/ARG)
*Please note that squad lists only become official after they have been submitted to and announced by FIFA.