Constantino Paul Castellano was born in Brooklyn in 1915, to Giuseppe Castellano and Concetta (née Casatu). Giuseppe was a butcher and an early member of the Mangano crime family, the forerunner of the Gambino family. Paul Castellano dropped out of school in the eighth grade to learn butchering and collecting numbers game receipts, both from his father.

(Note: Many sources state that Paul was married to Carlo Gambino's sister-in-law. While this statement is technically true, it is also misleading. Any woman married to Paul would be Gambino's sister-in-law, as Paul's sister Catherine had married Carlo Gambino in 1926. Nina Manno was not related to Gambino prior to her marriage to Paul.)

In July 1934, Castellano was arrested for the first time in Hartford, Connecticut for robbing a haberdasher. The 19-year-old Castellano refused to identify his two accomplices to the police and served a three-month prison sentence. By refusing to cooperate with authorities, Castellano enhanced his reputation for mob loyalty.

In the 1940s, Castellano became a member of the Mangano family. He became a capo under boss Vince Mangano's successor, Albert Anastasia.

In 1957, after Anastasia's murder and Carlo Gambino's elevation to boss, Castellano attended the abortive Apalachin Conference in Apalachin, New York. When New York State Police raided the meeting, Castellano was one of 61 high-ranking mobsters arrested. Refusing to answer grand jury questions about the meeting, Castellano spent a year in prison on contempt charges. On January 13, 1960, Castellano was sentenced to five years in prison for conspiracy to withhold information. However, in November 1960, Castellano's conviction was reversed by an Appeals Court.

In 1975, Castellano became acting boss for the aging Gambino.

On October 6, 1976, Carlo Gambino died at home of natural causes. Against expectations, he had appointed Castellano to succeed him over his underboss Aniello "Neil" Dellacroce. Gambino appeared to believe that his crime family would benefit from Castellano's focus on white collar businesses. Dellacroce, at the time, was imprisoned for tax evasion and was unable to contest Castellano's succession.

In February 1978, Castellano made an agreement between the Gambino family and the Westies, an Irish-American gang from Hell's Kitchen, Manhattan. Castellano wanted hitmen that law enforcement could not tie directly to the Gambino family. The Westies wanted Gambino protection from the other Cosa Nostra families. The Gambino-Westie alliance was set in a meeting between Westies leader James Coonan and Castellano. According to Westies gangster Mickey Featherstone, Castellano gave them the following directive:

In September 1980, Castellano allegedly ordered the murder of his former son-in-law Frank Amato. A hijacker and minor Criminal, Amato had physically abused his wife Connie Castellano (Paul's daughter) when they were married. According to FBI documents, Gambino soldier Roy DeMeo murdered Amato, cut up his body, and disposed of the remains at sea.

In 1981, at the height of his power, Castellano built a lavish 17-room mansion on a ridgeline in Todt Hill, Staten Island. Designed to resemble the White House in Washington, D.C., Castellano's house featured Carrara marble, an Olympic size swimming pool, and an English garden. He started a love affair with his live-in maid, Gloria Olarte, even though his wife Nina was living with him. FBI surveillance tapes recorded Castellano telling Olarte that he was going to undergo penile implant surgery to remedy his impotence. Castellano became a recluse, rarely venturing outside the mansion. Capos such as Daniel Marino, Thomas Gambino, and James Failla visited Castellano at Todt Hill to provide information and receive orders. When not entertaining guests, Castellano wore satin and silk dressing gowns and velvet slippers around the house.

In March 1983, the FBI obtained a warrant to install secret listening devices in Castellano's house. Waiting until Castellano went on vacation to Florida, agents drugged his watch dogs, disabled his security system, and planted devices in the dining and living rooms. These devices provided law enforcement with a wealth of incriminating information on Castellano.

On March 30, 1984, Castellano was indicted on federal racketeering charges in the Gambino case, including the Eppolitto murders. Other charges were extortion, narcotics trafficking, theft, and prostitution. Castellano was released on $2 million bail.

On December 16, 1985, Thomas Bilotti drove Castellano to the prearranged meeting at the Sparks Steak House in Midtown Manhattan. A hit team was waiting near the restaurant entrance. Positioned down the street were backup shooters Dominick Pizzonia, Angelo Ruggiero and Anthony Rampino. Gotti observed the scene from a car across the street.

Two weeks after Castellano's murder, a meeting of capos in a Manhattan basement elected Gotti as the new Gambino boss. The Castellano murder enraged Vincent Gigante, boss of the Genovese crime family, because Gotti never received permission for the act from the Commission. Gigante solicited the help of Lucchese crime family boss Anthony Corallo to kill Gotti. On April 13, 1986, a car bomb meant for Gotti exploded outside a Bensonhurst, Brooklyn social club. However, the only casualty was Frank DeCicco. Afterward, Gotti and Gigante called a truce.

On April 3, 1992, with the help of Gravano becoming a government witness, Gotti was convicted of numerous racketeering charges, including the 1985 Castellano murder. On June 24, 1992, Gotti was sentenced to life in federal prison, where he died in 2002. No one else was ever charged in the Castellano murder.

Gotti never felt that Castellano was an adequate gangster, nor fit for the role of Don. He assembled a group of high-level conspirators that included Gravano, DeCicco, Leonard DiMaria, and Joseph Armone. An initial plan was to kill Castellano outside his house, but Gotti was afraid of encountering federal agents there. Gravano suggested killing both Castellano and Billotti while they were eating breakfast at a diner. However, when Castellano announced a dinner meeting on December 16, Gotti and the other conspirators decided to kill him then. As of 2016, DiMaria is the only alleged conspirator who is not dead or in prison.