Protesters stormed the legislature, breaking windows and fences.
The country's 1992 constitution, introduced after 35 years of dictatorship, strictly limits the president to a single five-year term.
But sitting President Horactio Cartes is attempting to remove the restriction and run for re-election.
Protesters were photographed smashing in windows of the congress building in Asuncion on Friday night and setting fire to the interior.
The AFP news agency said protesters "ransacked" the offices of those who backed the bill.
Police used mounted units, rubber bullets, and water cannons to disperse the crowd. Local media reports said dozens of people had been injured, including protesters, politicians, and police officers.
Santi Carneri, a journalist in Asuncion, told the BBC the Congress building was on fire for "more than one or two hours".
There were "a lot of battles between people and the police in the streets", he said, adding that it was the worst violence of its kind since Paraguay became a democracy in 1992. See more photos below;
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