The dry forests of Latin America are among the most dynamic deforestation frontiers in the world and are important carbon and biodiversity reservoirs. Our knowledge on the spatial patterns of deforestation and its proximate drivers remains partial though. We used the full Landsat image archive to reconstruct deforestation and post-deforestation dynamics between 1987 and 2012 for the entire Paraguayan Chaco, where deforestation has been rampant recently. Our classification resulted in reliable land-use change maps (86.16%), highlighting drastic forest losses of almost 44,000 km(2) between 1987 and 2012, equaling a deforestation rate of 27% and about 1% yearly, predominantly for grasslands. These likely represented new pastures, making pasture expansion the dominant proximate cause of deforestation. Cropland expansion, in contrast, only played a minor role as a proximate deforestation cause in the Paraguayan Chaco. Deforestation more than doubled between 2001 and 2012 (similar to 29,000 km(2)) compared to 1987-2000 (similar to 14,000 km(2)), due to leakage effects from the deforestation ban in the Paraguayan Atlantic Forests in 2004. Interestingly, while grasslands expanded in the Paraguayan Chaco between 1987 and 2000, cattle numbers decreased during the same time period, though strongly increased since. This apparent decoupling of area change and land-use intensity may indicate that the Paraguayan Chaco experienced an amplification period during the 1990s followed by an intensification period since 2001. Thus, our results highlight the need for both, a more detailed monitoring of post-deforestation dynamics and a land systems perspective in order to understand deforestation frontiers and thus ultimately to identify strategies to better balance production and conservation goals.