In the Brazilian Pantanal, wildfire occurrence has increased, reaching record highs of over 40,000 km2 in 2020. Smoke from wildfires worsened the situation of isolated, as well as urban communities, already under an increasing toll of COVID-19. Here we review the impacts and the possible causes of the 2020 mega-fires and recommend improvements for public policies and fire management in this wetland. We calculated the amount of area burnt annually since 2003 and describe patterns in precipitation and water level measurements of the Paraguay River. Our analyses revealed that the 2020 wildfires were historically unprecedented, as 43% of the area (over 17,200 km2) had not been burnt previously in the last two decades. The extent of area affected in 2020 represents a 376% increase compared to the annual average of the area burnt annually in the last two decades, double than the value in 2019. Potential factors responsible for this increase are (i) severe drought decreased water levels, (ii) the fire corridor was located in the Paraguay River flood zone, (iii) constraints on firefighters, (iv) insufficient fire prevention strategy and agency budget reductions, and (v) recent landscape changes. Climate and land use change will further increase the frequency of these extreme events. To make fire management more efficient and cost-effective, we recommend the implementation of an Integrated Fire Management program in the Pantanal. Stakeholders should use existing traditional, local ecological, and scientific knowledge to form a collective strategy with clear, achievable, measurable goals, considering the socio-ecological context. Permanent fire brigades, including indigenous members, should conduct year-round fire management. Communities should cooperate to create a collaborative network for wildfire prevention, the location and characteristics (including flammability) of infrastructures should be (re)planned in fire-prone environments considering and managing fire-catalysed transitions, and depending on the severity of wildfires. The 2020 wildfires were tackled in an ad-hoc fashion and prioritisation of areas for urgent financial investment, management, protection, and restoration is necessary to prevent this catastrophe from happening again.