Phalotris multipunctatus was previously only known from the type specimens collected from two widely disparate localities in the Cerrado of southeast and central Brazil over 36 years ago. Here, it is documented to occur in Paraguay from two specimens recently collected at the highly diverse Rancho Laguna Blanca. Live coloration is described and notes on unusual defensive behaviors are provided, along with the first live image of the species. It is considered highly likely that the species is critically endangered in Paraguay, and probably globally endangered. The importance of Rancho Laguna Blanca for the conservation of this poorly-known burrowing snake and other rare Cerrado reptiles is highlighted, along with the imminent threats to its existence.