Nanawa was a salient jutting into the southern front, and Bolivia wanted it badly. Taking it would let the Bolivian army isolate Isla Poí, the Paraguayan headquarters and a vital water point to the northeast, then push on toward Concepción on the Paraguay River and the country's interior. In a war where control of water could decide a campaign, that prize was worth almost any cost. The outpost had been founded in 1928 by Ivan Belaieff, the exiled White Russian officer who had helped turn this patch of thorn forest into a fortress. By March 1933 it had become the headquarters of the Paraguayan Fifth Division. Its commander, Colonel Luis Irrazábal, had built a horseshoe-shaped defense facing west and packed it with four regiments. The carob-tree forest was about to face the hardest blow of its existence.

This was the Chaco War at its most mechanized. The Bolivians hit the line with artillery and mortar fire, air strikes, three Vickers light tanks, two small Carden-Lloyd tankettes, and four flamethrowers, weapons designed to burn defenders out of trenches at close range. The assault came in two prongs, one from the north and one from the south, with a diversionary force fixing the center in place. Part of the main redoubt fell to the attackers in the first rush. But the Paraguayans answered with their own artillery and with armor-piercing rounds, and they fought their way back into the overrun fortifications. One Bolivian tank was knocked out by artillery; the crippled machine was finished off by Paraguayan sappers who blew it apart where it sat.

By 9 July the assault was spent. The defenders had held, but the price on both sides was staggering for so small a piece of ground. Bolivia lost more than two thousand men killed and wounded; Paraguay, fighting from prepared positions, lost 559. The disparity tells the story of the whole war's southern front, where attacking across open scrub against entrenched machine guns was close to suicidal. These were young conscripts on both sides, fed into the same few hundred meters of trench line that had already consumed thousands in January, and the second battle earned Nanawa its enduring, mournful nickname: the South American Verdun. For many of the dead there would be no marked grave, only the scrub that closed over them where they fell.

The Paraguayans did not stop at survival. On 11 July they launched a counterattack on Bolivian positions in the wooded ground southwest of the outpost, near Gondra. That particular thrust failed, but it hardly mattered. The larger truth was that the strategic initiative, which had belonged to Bolivia since early 1933, had passed to Paraguay, and it would not return. Within weeks came the encirclement at Gondra; within months, the catastrophe at Campo Vía, where two Bolivian divisions surrendered. The German general Hans Kundt, who had hurled his men at Nanawa twice, would be dismissed before the year was out. The carob-tree forest that Bolivia tried twice to seize had instead become the place where its advance in the Chaco finally, irreversibly broke.