A prominent industry is the gathering and preparation of mate or Paraguayan tea (Ilex paraguayensis), which is an article of export.
Uruguayana was captured by a Paraguayan force under General Estigarribia on the 5th of August 1865, and was recaptured without a fight by the allied forces under General Bartolome Mitre on the 18th of September.
The Paraguayan occupation left the town partially in ruins, and it remained in a decadent condition until near the end of the century, when reviving industries in the state and a renewal of railway construction promoted its commercial activity and growth.
The principal industries are the cultivation and preparation of yerba mate (Paraguayan tea), cattle-farming, fruitgrowing, tobacco-planting and timber-cutting.
Paraguayan tea is used in place of the ordinary tea or coffee in many parts of South America.