Germany lost their first-ever World Cup penalty shoot-out as Paraguay progressed into the round of 16 in Foxborough.
Kai Havertz and Nick Woltemade missed to hand Paraguay the chance to win it, only for Antonio Sanabria to fluff his lines with the kick that could have put the South Americans through.
Fabian Balbuena also squandered a match-wining spot-kick, Manuel Neuer saving his effort low to his left.
But Jonathan Tah hammered his effort over the bar and Germany were not reprieved a third time with the outstanding Jose Canale firing in to spark wild celebrations.
Julio Enciso had earlier put Paraguay in front against the run of play late in the first half of normal time only for Havertz to level not long after the restart.
Germany thought they had won it in extra-time when Tah headed home a Nathaniel Brown corner only for Moroccan referee Jalal Jayed and the VAR to decide Paraguay goalkeeper Orlando Gill had been impeded by Waldemar Anton as the cross came in.
It seemed exceedingly harsh given the amount of physical contact allowed during the course of a largely forgettable 120 minutes.
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Paraguay start and end first half strongly
The first half started and finished with a Paraguay chance, Junior Alonso failing to turn home Enciso’s first-minute corner from the left after finding himself completely unmarked at the far post.
Germany survived and started to boss the game in midfield with Joshua Kimmich pulling the strings.
But a chronic lack of creativity saw their endeavours come to nothing as, time after time, they squandered possession or tossed a ball into the box that was gobbled up by Paraguay’s rugged central defenders.
Germany’s main attacking threats, Florian Wirtz, Havertz and Leroy Sane were largely anonymous with Paraguay looking relatively comfortable.
And having taken the sting out of Germany the South Americans then applied the sucker punch approaching the break.
From a recycled corner, the ball was slipped to Matías Galarza down the right and his inch-perfect cross was perfect for Strasbourg winger Enciso to head home.
Germany produce improved second-half display
Germany boss Julian Nagelsmann made one alteration at the break, bringing on Leon Goretzka for Felix Nmecha. It appeared a like-for-like change when Germany required the introduction of more creative players.
It did have the desired effect, though, but not until after Paraguay almost doubled their lead after 50 minutes.
The usually reliable Kimmich gave the ball straight to Enciso, who was through on goal but saw his effort save by the outrushing Neuer.
It was to prove a pivotal moment as Germany hauled themselves level four minutes later. It did not come from a brilliant passage of play but another cross into the box but this time Havertz got in front of his marker to get a glance on Wirtz’s centre and the ball flew into the right-hand corner.
For the first time all game, Paraguay were rocking and only a brilliant block denied Goretzka from putting Germany in front shortly afterwards.
The 63rd-minute introduction of Jamal Musiala for the ineffective Deniz Undav handed Germany even more control with the Bayern Munich star also enabling Havertz to push further forward.
The Arsenal man provided a greater aerial threat than Undav and he almost added a second headed goal with 13 minutes to go, rising to meet Wirtz’s centre but putting the ball straight at Gill from six yards.
Tah goal ruled out to Germany’s frustration
Extra-time was largely uneventful with Germany having all the ball but doing very little with it, although there was a moment of controversy two minutes before the break with Tah seeing his effort ruled out after minimal contact from Waldemar Anton on Gill.
Havertz then failed to narrowly divert another cross into the net as Germany’s frustration grew.
With bodies tiring, Paraguay did spring forward occasionally on the counter attack only to retreat at the first opportunity rather than squander possession.
The approach from Gustavo Alfaro’s players – that included playacting and time-wasting – was starting to irritate Germany and Musiala was arguably a little fortunate to see yellow, and not red, for a wild lunge on Galarza.
Anton then headed a corner straight at Gill from two yards with Germany’s final opportunity.
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