It is known that Bolivia is the first South American country to ever employ tanks in war. Bolivia also has the distinction of being the only South American country to employ tanks in battle on South American soil. The Chaco War (1932-1935), was a conflict between Bolivia and Paraguay over the Chaco Boreal (also known as the "green hell"), a nasty sparsely populated, region claimed by both countries. When the war began in 1932, the larger and better-trained Bolivian army initially held the advantage. However, superior tactics and knowledge of the terrain enabled the Paraguayans to gain control of most of the area by 1935. A treaty signed in 1938 gave Paraguay three-fourths of the region and Bolivia the rest. About 50,000 Bolivians and 35,000 Paraguayans died in the war. During this war, the Bolivian army used 5 tanks. Three were Vickers 6 ton tanks, two were Carden-Lloyd tankettes. The Vickers group were composed of 1 cannon and 2 machine gun units, and the tankettes were basically early Bren carriers. It is not known what happened to the tankettes, but all 3 Vickers were destroyed in action after doing considerable damage first. The cannon armed Vickers did an especially effective job destroying machine gun nests. It is distinctive to note that the Vickers 6 ton tank was a popular export of Great Britain. In some cases, if the client country had facilities, the plans were licensed. The tank was noted for being reliable, cheap, easy to maintain, expandable, good on protection, firepower, and good on crew comfort. The Vickers 6 ton was probably the best tank design of the pre-WW2 era. Were it went, it tended to dominate the field.

Bolivia remained neutral throughout most of WW II. Bolivia eventually declared war on the Axis nations under pressure from the US, but it took no real action.