Ten-man Paraguay scored a surprise 2-1 victory over Brazil on Wednesday, pushing the world champions into the second qualifying berth in Group C of the Copa America football tournament.

On the same night that Costa Rica managed a shock 2-1 win over Chile, Paraguay upset the odds by defeating a Brazil team who had already made travel arrangements on the assumption that they would obtain top position in the group.

Julio Gonzalez headed Paraguay into a first-half lead only for Luis Fabiano to equalise seven minutes later.

Fredy Bareiro stunned Brazil with the winning goal on 71 minutes.

Three minutes later, Paraguay's Emilio Martinez was sent off for an off the ball foul on Brazil's Gustavo Nery, showing his frustration after the referee had ignored penalty appeals for an apparent foul on Bareiro.

The result means Brazil will face Group B winners Mexico in the quarter-finals, while Paraguay have earned a meeting with Uruguay, who were third in that group.

With Maicon replacing Mancini at right back and Felipe in for Alex in midfield, Brazil played with greater fluency and dominated the play for long periods.

Paraguay defended well and counter-attacked dangerously. The underdogs also exposed a Brazilian vulnerability to high crosses with the sequence that led to the first goal.

Brazil goalkeeper Julio Cesar saved from point blank range when a mix-up between the central defensive pairing of Luisao and Cris allowed Edgar Barreto to ghost in and connect inside the six-yard box.

From the resulting corner, Gonzalez escaped his markers to power Paraguay into the lead.

"We know that Paraguay are very effective with the high ball and once again this has worked for them. We paid dearly for failing to defend ourselves against something that we knew was coming," Brazil coach Carlos Alberto Parreira said.

"Losing is never nice but at least we could afford to lose this one."

Luis Fabiano scored a fine equaliser on 35 minutes, chesting down a cross from midfielder Kleberson and shooting high into the net from a tight angle.

The game seemed to be drifting toward a draw in the second half when Paraguay stunned Brazil by regaining the lead.

Figueredo knocked on a hopeful ball from midfield and a gaping hole opened up in the Brazilian defence, allowing Bareiro to slot the ball past Julio Cesar.

Paraguay held off a final flurry of attacks to collect the win and they will stay in the south to play Uruguay in Tacna on Sunday.

Brazil must travel 2,000 km north to Piura to face Mexico, also on Sunday.