This paper deals with mechanisms of grammatical change in Ache, focusing on inflection. Ache contains restricted functional morphology when compared to most Tupí-Guaraní languages. Although erosion of inflection is attested in linear historical developments within this genetic context; the degree of inflectional erosion observed in Ache is exceptional. Ache lacks all TG prefixes, consequently, processes linked to person-number agreement, such as person hierarchy effects, are unattested. Ache enclitics for tense-aspect-mood marking (TAM) appear to be more similar to other TG languages. However, given closer examination, also for TAM considerable restructuring is revealed. Besides describing erosion and retention patterns of inflection, it is exemplified how Ache copes with the overall functional restructuring by generating innovative syntactic patterns and novel lexical items. Inspired by subclasses of inflection given in Roberts and Bresnan (2008), it becomes evident that inherent inflection (i.e. TAM) is far more stable in Ache than so-called contextual inflection (i.e. person, case); a characteristic result of contact induced grammar change. Thus, this study of inflectional restructuring contributes strong evidence for the long-standing hypothesis that Ache is a TG contact language (Dietrich, 1990; Rodrigues, 2000; Rößler, 2008).