A smiley, gray-bearded man who often wears sandals and speaks in moderate tones, Lugo has inspired Paraguayans fed up with conditions in the poor South American country known for corruption and contraband.
Lugo calls himself an independent and has steered clear of South America's more radical left-wing leaders, such as Venezuela's Hugo Chavez and Evo Morales in Bolivia, but is seen as a likely ally of moderate leftist presidents in the region.
"I'm supporting Lugo because he cared about poor people when he was bishop and I think he's honest and won't steal from the Paraguayan people like all the other politicians have," said Pedro Ramirez, a 19-year-old street vendor.
Ovelar is the first woman to run for president but fraud allegations and bitter divisions marred her party's primary election and weakened support for her.
Retired army Gen. Lino Oviedo, who was freed from prison last year after the Supreme Court overturned his sentence for plotting a coup in the mid-1990s, trailed in third place in Sunday's election.
The Colorado Party has dominated Paraguayan politics since it took power in 1947, and it backed Gen. Alfredo Stroessner's brutal 35-year dictatorship until helping to oust him in 1989.
A landlocked country dwarfed by wealthier neighbors Argentina and Brazil, Paraguay relies economically on agricultural and hydroelectric power exports. But nearly four in every 10 Paraguayans are poor and many are tired of widespread corruption.