Caballero joined the Paraguayan Army in 1864 and fought in the Paraguayan War. He participated in the Mato Grosso Campaign. Later he became the assistant of President Francisco Solano López in Humaitá and remaining loyal, rose through the ranks. He became an increasingly important leader of rearguard actions, eventually becoming a cavalry general. Caballero was the greatest living war hero, who was captured by Brazilians on April 8, 1870 near the Apa river after the Battle of Cerro Corá and released in May 1871. During his arrest he became friendly with Brazilians and their political and military support was instrumental later, during his political career.