The coup attempt failed, 78 people were killed and Colonel Chavez was jailed. But he was paroled after two years and on Sunday he is likely to be elected as president of the South American nation in a democratic vote. It is a prospect that gives businessmen in Venezuela, not to mention investors around the world, the jitters.
Venezuela has the world's largest oil reserves outside the Middle East and a free-market economy lauded by the International Monetary Fund. Colonel Chavez, 44, says that has done nothing to ease the poverty endured by half the nation.
He is promising a populist programme that has led his opponents to compare him with both the wartime Italian dictator Benito Mussolini and the Cuban leader, Fidel Castro.
Even his supporters call him "el comandante", the title preferred by Fidel Castro for the past four decades. Many illiterate Venezuelans even see him as "the second coming of Christ". Some of his opponents describe him as "nuts".
Among his plans: to declare a temporary moratorium on his country's foreign debt and to dissolve congress in order to draw up a constitution that he says will be more beneficial to the poor. As a result, the Venezuelan currency, the bolivar, has been sliding as the wealthy have begun moving their money abroad, mostly to the United States. Estate agents in Florida have had a rush in sales and leases of apartments to Venezuelans ready to flee the retired colonel's regime.
Until recently, the election was billed as a battle between "the Beauty and the Beast". Col Chavez, a retired paratrooper, was considered the latter.
The beauty was a former Miss Universe, Irene Saez, a 36-year-old who was running ahead in the polls until the summer. She had successfully served as mayor of a better-off municipality in the capital, Caracas, but her high media profile belied a lack of grass roots support around the country.
A series of bad campaign moves, notably putting herself forward as the candidate for the centre-right Christian Democrat party (known by its acronym Copei), diluted her popularity and Col Chavez surged to the front with a predicted 50 per cent of votes.
In a last-minute effort to keep him from power, both Copei and the country's other traditional big party, the centre-left Democratic Action, united behind a single candidate.
Both are now pinning their hopes on Henrique Salas Romer, 62, the suave, Yale-educated businessman and former economics professor best known for his successful tenure as governor of the state of Carabobo. He has pledged to halve the 1.3 million state workers whose salaries are seen as a drain on the budget and to implement a low-interest credit programme for small businesses.
In the latest polls, Mr Salas is trailing Col Chavez by 12 points, with a predicted 38 per cent of the vote. Ms Saez, who said she would run as an independent after being pushed aside by Copei, looks like receiving only a single-figure percentage.
Reacting to the name of Col Chavez's coalition, the Patriotic Pole, his opponents have billed themselves the Democratic Pole but Ms Saez said the new name merely polarises the nation further. "We are all democratic and we are all patriotic," she said at a campaign rally in Caracas. "We are all one people."
Well aware that his best chance is to scare voters away from his main opponent, Mr Salas upped the ante yesterday when he labelled Col Chavez "a monster, a coward and a potential dictator".
His comments not only heated up the campaign but poured fuel on rumours that the armed forces, fearing a Castro-style populist regime, might launch a coup d'etat if their former comrade wins.
The man Col Chavez tried to overthrow in 1992, the then President Perez, this week warned of a "violent rupture of the constitutional order" if Col Chavez wins.
"We have to admit we're within sight of a possible coup d'etat," he said.
As it turned out, it was not Col Chavez who overthrew Mr Perez - widely known in Venezuela as "Cap" from his initials - but corruption charges. The former president was jailed in 1993 until recently. The man elected to succeed Mr Perez - current President Rafael Caldera - pardoned Col Chavez in 1994 after he had spent two years in jail for his coup attempt.
"Go ahead, call me a coup leader," Col Chavez yelled at a recent campaign rally. "Raise your hands if you think the coup was justified." The thousands present did so. His support shows disillusionment with the fact that the free-market economics pushed forward by President Caldera have brought no improvement for the country's poor.
It is a sentiment increasingly seen throughout Latin America. Added to that is the widespread feeling that Mr Caldera's government has hovered between inept and corrupt.
"Chavez will not be beaten by any earthling," said Aristobulo Isturiz, a political analyst. "Someone would have to come from another planet."
"He's nuts. He's completely out of his mind," said Carlos Delgado, an architecture professor. "If he wins, I'll go underground."Reuse content