The South Americans seemed the better team for much of their opening 1-1 draw with world champions Italy and easily beat Slovakia 2-0 to top Group F ahead of Thursday's match.
New Zealand, one of the lowest ranked sides in South Africa at 78th in the world and with no big name players, have confounded the pundits by holding Slovakia for their first ever World Cup point and then Italy by the same 1-1 scoreline.
As underdogs, the affable All Whites are fast becoming a favorite for neutrals across the world and should garner most cheers at Polokwane's Peter Mokaba Stadium.
Their fans at home have been glued to screens watching an unheralded squad surprise the world, leading to an explosion of interest in soccer in a rugby-mad land.
But a win, or even another draw, may be a bridge too far.
Paraguay are expected to push for goals through Roque Santa Cruz, Nelson Valdez and Lucas Barrios — a striking trio that overpowered Slovakia.
"When we face New Zealand, we need to go out with the same attitude. Qualifying is down to us," said Paraguay defender Paulo Da Silva.
Paraguay, who have four points ahead of Italy and New Zealand on two, need only draw to guarantee their progress but will be wary of the Kiwis' height and prowess at set pieces.
"New Zealand have shown in their two previous matches that they have an important physical strength and that they are good in the air," Da Silva told reporters.
"They are good on counter attacks and we have to keep doing what we did against Slovakia."
Paraguay's Argentine coach Gerardo Martino could slot the fit-again Santa Cruz in behind Barrios and Valdez — a potent attack that would test a New Zealand back four that will again be led by the inspirational Ryan Nelsen.
The All Whites captain marshaled his troops admirably during an onslaught by Italy on Sunday, when goalkeeper Mark Paston and the woodwork saw off 23 shots, seven on target.
In contrast, New Zealand managed just one shot on target — Shane Smeltz's seventh minute goal — and not one corner.
New Zealand, who will be unchanged, need a win to guarantee qualification but if Italy and Slovakia produce a stalemate the All Whites could go through with a higher scoring draw.
What they lack in experience and skill, the Kiwis make up for with spirit and self belief and, having already exceeded expectations, all the pressure will be on Paraguay.
"We're going to have to work as hard as we did (against Italy) and maybe even a bit more but it's not beyond us," forward Chris Killen told Reuters.
"We've got enough heart to go out and do it again."
New Zealand have astounded fans across the world with a show of gritty determination but Killen asked for a bit of luck, too, bemoaning a debatable penalty for Italy that saw the champions equalize and a hint of offside in Slovakia's goal.
"A few results have gone against us but hopefully against Paraguay we'll get a few that will go for us. Hard luck can only be against you for so long," he said.
