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The relative geographical isolation of Paraguay has always been an essential attribute of its cultural production, including its architecture. This condition has also made Paraguay a late and eclectic adopter of the principles of the Modern Movement in architecture. While Oscar Niemeyer’s pavilion for the 1939 world’s fair represented a hallmark in the definition of a Latin American Modern Architecture, some of the first examples of this type of architecture in Paraguay appear just in the 1950s. Overlooked for decades, recent investigations developed in the last years have studied the architectural production in Asuncion during the mid-twentieth century through the lens of historical, sociopolitical, and aesthetic considerations. There are two modern buildings in Asuncion, the capital, which can be considered of utmost importance for their scale and their meaning as cultural artifacts: the Colegio Experimental Paraguay-Brasil —designed in 1952 by Affonso E. Reidy— and the Hotel Guarani —designed in 1956 by the Brazilian architects Adolpho Rubio Morales, Rubens Carneiro Vianna, and Ricardo Sievers. While several studies have investigated the first, the Hotel Guarani has received much less attention despite its strategic location in downtown Asuncion and introducing novel architectural strategies in terms of urban space configuration. In this paper, through digital reconstruction and formal analysis of this emblematic case study, we analyze the architecture of the building with a focus on the design strategies that defined new urban spatial relationships between the building and the city of Asuncion. Through a formal reconstruction of the project, we identified several architectural concepts such as permeable street-level floorplan, semi-public corridors, and large overhangs. We argue that these design strategies contributed to the new architectural language of the incipient Paraguayan modern architecture.