The introduction of no‐tillage farming stabilized soybean [Glycine max (L.) Merr.] yields on “Terra Rossa” soils of eastern Paraguay at a yield level that is among the highest in the world. The objective of this study was to clarify the effect of long‐term no‐tillage in a soybean‐based farming system on physical properties of “Terra Rossa” soils with different texture. Four farmers' fields of different soil texture were studied in 1990 and 2000. Two fields had fine‐textured soil and other two had coarse‐textured soil. A 1‐m deep pit was prepared at each site at the exact same location in 1990 and 2000, and clay contents, bulk density, cone index, saturated hydraulic conductivity (Ksat), aggregate‐size distribution, and Ap horizon thickness were investigated. To evaluate changes in Ap horizon thickness over time, data from several additional pits were included. Effects of long‐term no‐tillage on physical soil properties differed with soil texture. High erosion rates were associated with coarser soil texture, low Ksat, poor aggregate stability, and high compaction. Coarse‐textured soils lost 34% (about 7 cm) of their Ap horizon in 10 yr compared with 11% in fine‐textured soils. Cone index readings in the subsoil of a coarse‐textured soil became extremely high (4.72 MPa). Soil compaction was furthermore associated with rapid soil drying and on the sixth day after rain reached a level that could restrict vertical root development of germinating seedlings. These results suggest that the no‐tillage system as currently practiced in eastern Paraguay may not be suitable for coarse‐textured “Terra Rossa” soils.