Paula Kelly was born on April 6, 1919, in Grove City, Pennsylvania, to Dr. Herbert Augustus and Julia Clarice Kelly. She began her singing career in her hometown with her sisters, forming a vocal trio known as the Kelly Sisters. Following the death of her sister Martha in 1938, Paula transitioned to a solo singing career. She performed with several orchestras, including those led by Dick Stabile, Artie Shaw, and Al Donahue.

In 1941, Kelly joined Glenn Miller's orchestra, replacing Dorothy Claire. She soon became the female lead of The Modernaires, a vocal group that evolved from a male trio into a quintet with her inclusion. Her first recording with The Modernaires was "Perfidia," alongside Dorothy Claire. After Glenn Miller's band dissolved in 1942 due to his military service, Kelly continued to perform with The Modernaires until her retirement in 1978.

Paula Kelly married Hal Dickinson, a member of The Modernaires, on December 31, 1939. They had three daughters and remained married until his death in 1970. In 1976, she married Richard L. Turner and lived in Laguna Beach, California, until her death on April 2, 1992, in Costa Mesa, California. Kelly was known for her contributions to big band music and her role in keeping swing era music alive through her performances with The Modernaires.