This study examines the current linguistic reality of the urban sector of Paraguay, specifically that of the capital city, Asunción. The main goal is to analyze the linguistic changes that have occurred in the most urbanized city in the country in the last decade of the 20th century. According to the 1990 and 2000 data on language use among asuncenos, there is a clear tendency toward Spanish-Guaraní bilingualism. This may be attributed to the progress observed in the educational, political, and cultural aspects of the Guaraní language. This language, with a long oral tradition, is now recognized by the government and is a part of the school system. Nevertheless, there is still a marked division with respect to the linguistic functions that Spanish and Guaraní fulfill. This article presents a detailed analysis of language function.