Hosts Brazil won the round of 16 match as expected, though in the hardest way.
With the win, Brazil keep their dream of a sixth World Cup alive after escaping a tremendous challenge from Chile here on Saturday.
The whole nation was relieved as the cross-bar denied a fierce shot from Chilean substitute Mauracio Pinilla at the 119th minute in extra time.
Both sides tied for 1-1 in the regular and extra time, but Brazil withstood the pressure in the penalty shoot-out by claiming the victory 4-3 in aggregate goals.
David Luiz' s 18th-minute goal off a corner put the host ahead but Alexis Sanchez took Brazilian defense' s error to level the score for Chile in the 32nd minute. Chile looked to be the stronger side in the second half but Brazil held on to force the game into extra-time.
The good luck was apparently not on Chile's siade as Pinilla rattled the crossbar with less than one minute left before the end of the extra time. The 1-1 tie forced both sides into the penalty shoot-out.
In the penalty shoot-out, when the fifth Chilean player Gonzalo Jara hits the post, the Estadio Mineirao Belo Horizonte erupted into wild excitement as Brazil eventually won the penalty shoot-out 3-2.
Neymar scored the third and winning penalty after David Luiz and Marcelo also scored from the spot. Brazil goalkeeper Julio Cesar saved the first two penalties and watched Gonzalo Jara's final attempt hit the post.
Chile have ended in all of the four World Cup encounters with Brazil in heavy defeats. In both 1998 and 2010, they lost by three-goal margins, in the round of 16 in 1998 and 2010 after second-place finishes in their group. The other reverse was a 4-2 semi-final loss on home soil in 1962.
Chile have only managed two draws from 13 meetings since they last overcame the Brazilian side in 2000.
Brazil will next face either Colombia or Uruguay in the quarterfinals. BELO HORIZONTE, Brazil, June 28 (Xinhua)