São Paulo is the annual stage for the largest gay pride march on Earth and home to one of South America's most vibrant gay communities. But a wave of homophobic murders has cast a shadow over one of the most tolerant cities in Latin America.

Six months after 3.5 million revellers gathered on the streets to celebrate gay pride, police announced last week that they were hunting for a serial killer thought to be responsible for as many as 16 murders on the western outskirts of São Paulo, Brazil's largest city.

Police believe the killer - labelled the Rainbow Maniac by the press - is behind the murders of 13 men in Carapicuíba, a city of nearly 400,000 people in greater São Paulo. They were killed in a park used as a gay meeting point. Police are now investigating whether the same killer was behind three murders in the neighbouring city of Osasco, where a similar weapon was reportedly used.

One of the victims was a transvestite, shot in one of the city's many love motels. 'In his head, he thinks he is doing a clean-up job,' said Paulo Fernando Fortunato, the police chief heading the inquiries. 'He doesn't like homosexuals, he hates them.'

The killing began on 4 July 2007 when 32-year-old José Cicero Henrique was murdered in the Paturis park. Since then another 12 men have been killed in the park, nine in virtually identical circumstances. Their half-naked bodies were dumped in the undergrowth with a .38 bullet in the back of the head and their trousers wrapped around their knees.

Fortunato said one of the men was beaten to death while the latest victim, whose body was found in August and has not yet been identified, was shot 12 times. Police sources told newspapers the hail of bullets had turned his body into a 'sieve'. One local newspaper suggested the killer may have arranged meetings with his victims over the internet, using the social networking service Orkut.

No link was made between the 13 murders until recently. Last week the governor of São Paulo, José Serra, visited Carapicuíba and vowed that police would catch the Rainbow Maniac. Plainclothes officers are now patrolling the park at night. The 13-month killing spree coincides with a recent study by the Grupo Gay da Bahia, Brazil's oldest gay rights group, that described Brazil as leading the world in the murder of homosexuals. According to the study, there were 122 homophobic murders in Brazil in 2007, compared with 35 in Mexico and 25 in the US. A previous study claimed that between 1980 and 2006 at least 2,680 gay people were killed in Brazil, mostly as a result of homophobic violence.

Brazil has some of the world's most progressive laws on sexual discrimination. Until 2005 the government lobbied the UN to adopt a resolution condemning discrimination against gays and lesbians. Both Rio de Janeiro and São Paulo are major destinations for gay tourists from the US and Europe, while the federal government recently launched a drive to make the country more 'gay friendly'.

Next year Rio de Janeiro's first gay samba school, nicknamed the Rainbow School, will join the carnival. But activists say prejudice remains widespread. Openly gay figures remain a rarity in Brazilian politics and sport. A 2006 study at São Paulo's gay pride march found that 65 per cent of those polled had suffered physical or verbal abuse as a result of their sexuality. 'People don't understand, so they attack,' said Alessandra Saraiva, a representative of São Paulo's gay pride association and one of the organisers of a recent campaign, 'Homofobia Mata!' ('homophobia kills'). Saraiva said a study by her organisation found that 70 per cent of São Paulo's transvestites had suffered some kind of violence.

Many blame the intolerance on ultra-conservative evangelical sects which see homosexuality as the work of the devil. One church performs 'exorcisms' of gays and lesbians live on TV, while churches promising to 'cure' gays and lesbians can be found across the country.

Police stepped up patrols of the park last week, despite the arrest of a suspect. Jairo Francisco Franco, 46, a retired police sergeant, was seen by two witnesses committing the 13th murder in the park, police said. João Batista, owner of the supermarket where Franco was a security guard, said on TV that his employee had seemed like 'a calm guy'.