Ritter was born in Prague on 6 April 1925 to Jewish parents Carl Ritter and Elsa (née Schnabel). In 1939, at the age of 13, Ritter was evacuated from Czechoslovakia to England via the Kindertransport. He graduated as a Bachelor of Architecture and Master of Civic Design from the University of Liverpool. In 1946 he married fellow-graduate Jean Patricia Finch with whom he eventually had five daughters and two sons.

From 1954 to 1964 Paul and Jean Ritter ran the Ritter Press in Nottingham, where Paul taught at the School of Architecture from 1952 to 1964, when the School moved to the University, and a new professor was appointed. Ritter Press mainly published the journal Orgonomic Functionalism, devoted to the work of Wilhelm Reich, which appeared in 38 issues in 10 volumes. Paul Ritter was the Editor and main contributor. Reich did not accept him as his follower, and wrote in a letter to A. S. Neill: "He claims now to establish the TRUE Functionalism. I am a kind of precursor. He is ending in utter confusion." After Reich's death in 1957 Ritter edited a Reich Memorial Volume with contributions by the Ritters, Neill, Nic Waal, and the later Reich biographer Myron Sharaf.

Throughout their life the couple would combine their talents, shared interests and idealism in an enduring professional partnership which they named 'The Planned Environment and Educreation Research (PEER) Institute'. Together they wrote and published their first book in 1959 entitled, 'The Free Family', describing how they applied their beliefs about child rearing to their own children.

In the early 1960s Ritter was teaching at the Nottingham School of Architecture while acquiring an international reputation as an architectural theorist with new ideas and unquenchable Energy. His 1964 book, Planning for Man and Motor contained his theories and advocacy for the separation of pedestrians and cars and brought him to the attention of the global planning profession. Mr W. A. McI. Green, Town Clerk of Perth City Council (PCC), invited Ritter to head the council's newly formed Department of Planning. Ritter accepted, and after migrating with his family to Perth in late 1964, began work as Perth's first City Planner in May of the following year.

Jane Jacobs's 1961 work The Death and Life of Great American Cities was criticised by many of the modernist planners and Architects of the time, Paul Ritter included. He called her a "muddle-headed influence in planning" and declared that she should never have had the chance to put her ideas forward. Her book was a "shallow analysis of planning problems" and she undermined the best planning practices by taking no account of changes to the car, to the environment and to the modern city. He ridiculed her "confused thinking" and insistence upon streets and small blocks over the superblock for which he was an advocate in his 1964 work, Planning for Man and Motor:

He arrived at a transitional time in the history of Perth. McI. Green had been what Ritter later described as one of those "rare breed of dictators whom power does not corrupt", and whose professional qualifications in architecture and town planning had adduced idealism and leadership that he felt was "totally out of kilter" with the era that followed. Retiring in 1965, Green was unable to have his preferred candidate appointed City CEO, and his replacement, G. O. Edwards, was a man whom Ritter felt was inadequate, and lacking the "enthusiasm, dedication and force of personality that Mc I. Green had provided in keeping council and councillors in order and staff loyal and committed."

Following his sacking in 1967 a committee comprising Sir Walter Murdoch, Mary Durack Miller, Stella O'Keefe, Professor E. K. Braybrooke, Professor G. C. Bolton, Thomas Wardle and Dr. R. B. Lefroy was formed to inquire into the dismissal. He later successfully sued for wrongful dismissal.

With his public profile bolstered by his dismissal, five months later Ritter was able to return to the City of Perth as a councillor for the East Ward. From 1968 to 1986 he would become a prominent figure during the decline and subsequent transition of East Perth. As a councillor he showed concern for the amenity of East Perth, encouraging improvements to programs of street-sweeping and rubbish-removal, and seeking to involve the community in the decision-making process. As a member of the city's town planning committee he sought to hasten the construction of the city by-pass to overcome the deterioration of buildings in the freeway reserve and the exodus of Business and residents. Ritter continued to self-publish newsletters and pamphlets outlining his ideas. "For too long", he wrote in one, "planning East Perth was delayed because of Railway and Freeway uncertainties. Now that these have been overcome and we are pressing for special efforts to give the sort of attention that has been lavished on West Perth to East Perth planning".

In 1970 Paul Ritter was involved in the design of the Crestwood Estate in Thornlie, Western Australia. To this he introduced Radburn principles. Every house sits on the edge of a park, and movement on foot through the development is possible without encountering vehicles. In 1971 he was appointed by the state Minister for Town Planning (H. E. Graham) to report on the MRPA proposals for the Corridor Plan for Perth; however his report had little impact. He spent 36 years as a ministerial adviser. He was a member of the Committee for a Vision of Perth in 2029 . He also produced the "1999 Ideas Plan" for the City of Perth, was involved with the "Perth in 2029" report and created a series of 13 half-hour Channel 31 TV programs about the report, entitled "The Sensitive Future".

In the Supreme Court Gardens in central Perth, his sculpture "The Ore Obelisk" (1971) symbolises the diversity of mining industry from which Western Australia's wealth is largely derived.

In the late 1980s Ritter served 16 months of a 3-year prison sentence in Fremantle and Karnet prisons for attempting to mislead the Commonwealth export grants Board; he maintained that he had been framed, and considered appealing to the High Court of Australia. After his release he published Curses From Canberra: public Service conspiracy and the failure of democratic safeguards and a collection of the poems and artwork he produced while serving his sentence. "They put me there against my will" he wrote, "There will be no apology / Prison is a great big phoney / The theory for it is pure baloney" and "Errors that placed me in this cage / Are still the subject of some rage."

Ritter's ideas and achievements left a profound and enduring legacy. He was responsible for 'a far sighted parking plan’ and multilevel structure that took advantage of the central city topography to lay the foundations for a vibrant pedestrian precinct with walkways linking the Northbridge cultural centre via arcades to St Georges Terrace. He worked to preserve many historic buildings through a variety of means, including the alteration of plot-ratio requirements, was partially successful in limiting reflective glass on skyscraper facades and participated in the successful campaign to save the Barracks Arch from demolition. He held frequent public meetings to persuade people of his ideas and drew up a town-planning scheme for Perth.