The twister on Friday evening flipped cars like toys and wrecked buildings in Rio Bonito do Iguacu, a town of 14,000 people in Parana state, the local weather service reported.
The storm lasted only minutes but hit with hail and ferocious winds swirling at up to 250km/h (155 miles).
“It destroyed everything. It destroyed the town, houses, schools. What will become of us?” said Roselei Dalcandon as she stood by a pile of rubble that used to be her shop.
The tornado killed at least six people and injured around 750, the Parana state government said. One person is reported missing.
Five of the killed were adults and the sixth was a 14-year-old girl
Civil defence officials said 90 per cent of the town suffered some damage