He was born in Bamberg, Germany on 30 July 1925, the son of Stefan Pauson and his wife, Helene Dorothea Herzfelder.^[3] His parents escaped to England in 1939 with Peter and his two sisters to flee the Nazi persecution of Jews.^[4]

In 1942 the family moved to Glasgow and he began studying chemistry in the University of Glasgow under Thomas Stevens Stevens. After graduating in 1946, he moved to Sheffield University as a postgraduate, studying under Robert Downs Haworth and receiving his doctorate in 1949. He then went to Duquesne University in Pittsburgh, Pennsylvania and pursued research on tropolones and other aromatic non-benzenoid molecules. His discovery of ferrocene with his student, Thomas J. Kealy, arose from an attempt to dimerize cyclopentadienylmagnesium bromide using Iron(III) chloride; the orange-yellow solid with formula C₁₀H₁₀Fe was described as a "molecular sandwich" in Pauson's note which was published in Nature in 1951.^[5]

From 1951 to 1952 he studied at the University of Chicago under Morris Kharasch, then becoming a DuPont Fellow at Harvard University. He then gained practical experience at the DuPont Laboratories in Wilmington. Returning to Britain, he became a lecturer at Sheffield University and in 1959 became Professor of Organic Chemistry at Strathclyde University. In 1964 he was elected a Fellow of the Royal Society of Edinburgh.^[6]

Pauson and his postdoctoral assistant, Ihsan Khand, discovered the reaction now renowned as the Pauson–Khand reaction in 1971, though Pauson always referred to it as the "Khand reaction".^[5]

In 1994, the University of Strathclyde established the Merck Pauson Chair in Preparative Chemistry, funded by Merck, marking the contribution of Pauson to chemistry and to the university.^[7]

Pauson retired in 1995 and died peacefully at home on 10 December 2013. He was cremated at Clydebank Crematorium.^[8] In his obituary, he is described as "a gentleman of modesty, humility, and compassion … a fine man and a marvellous scientist".^[5]

He married Lai-Ngau Mary (née Wong) (1928 – March 18, 2010),^[9] having met her at a party hosted by Enrico Fermi when Pauson was at the University of Chicago in the early 1950s.^[5] They went on to have two children, Hilary and Alfred.^[10]

• Organometallic Chemistry (1967)
• Kealy, TJ; Pauson, PL (1951). "Bis-cyclopentadienyl iron: a molecular sandwich". Nature. 168 (4285): 1039–1042. doi:10.1038/1681039b0. S2CID 4181383.
• US 2,680,756, Pauson, Peter L, "Dicyclopentadienyliron and process of making the same", issued 1954-06-08, assigned to E I du Pont de Nemours and Co 
• Pauson, Peter L (1955). "Tropones and tropolones". Chemical Reviews. 55 (1): 9–136. doi:10.1021/cr50001a002.
• Pauson, Peter L; Segal, John A (1975). "Formation of substituted cyclohexadienyl tricarbonylmanganese complexes by nucleophilic addition reactions of functionally substituted ($\eta$-arene) tricarbonylmanganese cations". Journal of the Chemical Society, Dalton Transactions (16–17): 1683–1686. doi:10.1039/dt9750001683.
• Pauson, Peter L (1977). "Aromatic transition metal complexes – the first 25 years". Pure and Applied Chemistry. 49 (6): 839–855. doi:10.1351/pac197749060839. S2CID 98522726.
• Pauson, Peter L (1980). "Nucleophilic addition to transition metal complexes". Journal of Organometallic Chemistry. 200 (1): 207–221. doi:10.1016/S0022-328X(00)88647-7.
• Pauson, Peter L (1985). "The khand reaction: a convenient and general route to a wide range of cyclopentenone derivatives". Tetrahedron. 41 (24): 5855–5860. doi:10.1016/S0040-4020(01)91424-3.