Eurico Dutra proved a colourless figure, and when Vargas ran for the presidency in 1950 he won a crushing victory, the old dictator "returning on the arm of the people", as he wrote later. But he had powerful enemies, in the armed forces and on the right, and his second stint in power was turbulent. Dutra had allowed inflation to climb, and Vargas proposed to raise the minimum wage and slightly increase taxation of the middle classes. In the charged climate of the Cold War this was denounced by the right as veering towards communism, and vitriolic attacks on Vargas and his government were made in the press, notably by a slippery, ambitious journalist named Carlos Lacerda .

Vargas's supporters reacted angrily and argument turned into crisis in 1954, when shots were fired at Lacerda, missing their target but killing an air force officer guarding him. The attempt was traced to one of Vargas's bodyguards, but Vargas himself was not implicated. Even so, the press campaign rose to a crescendo, and finally, on August 25, 1954, the military High Command demanded his resignation. Vargas received the news calmly, went into his bedroom in the Palácio de Catete in Rio and shot himself through the heart.

He left an emotional suicide note to the Brazilian people: "I choose this means to be with you always & I gave you my life; now I offer my death. Nothing remains. Serenely I take the first step on the road to eternity, as I leave life and enter history." The initial popular reaction of stunned shock gave way to fury, as Vargas's supporters turned on the forces that had hounded him to death, stoning the newspaper offices and forcing Lacerda to flee the country. Eighteen months of tension followed, as an interim government marked time until the next election