The son of Anne, a stage singer, theatre teacher, and stage manager, and Thane Bettany, a dancer, actor and drama teacher. He has an older sister, Sarah, and had a younger brother, Matthew, who died after a fall at Queenswood when he was eight years old. Bettany, who was raised Catholic, is now an atheist.
While Thane taught at the all-girls boarding school Queenswood School in Hertfordshire, the family lived on the campus. Soon after his brother's death, Paul left home and went to live on his own in London and his parents later divorced.
When Bettany was 19, he decided to be an actor, and he pursued that career with determination, studying at the Drama Centre London in Chalk Farm. He made his stage debut in Stephen Daldry's acclaimed West End revival of An Inspector Calls at the Aldwych Theatre, playing the part of Eric Birling.
When Bettany was 21 he appeared in a BBC production of Oliver Twist, as Bill Sikes.
He filmed several more movies, including his first leading role in Gangster No. 1. The British Independent Film Awards nominated him for Best Actor, and the London Film Critics' Circle nominated him for British Newcomer of the Year.
Bettany's next major project saw him starring again alongside Russell Crowe in Peter Weir's Master and Commander: The Far Side of the World. His portrayal of surgeon and naturalist Stephen Maturin brought in more critical acclaim, including a BAFTA nomination, British Actor of the Yea, and Best Actor.
On June 28, 2004, Bettany and 13 other actors were included in the 2004 invitation to join the Academy of Motion Picture Arts and Sciences.
In 2007, Bettany went to London to star in There For Me, written by his friends Dan Fredenburgh and Doraly Rosen. In 2008, he appeared in the New Line Cinema family fantasy Inkheart, playing the part of a fire-eater named Dustfinger.
On New Year's Day 2003, Bettany married Jennifer Connelly in a ceremony attended by a small circle of friends and family; they had begun dating while starring together in A Beautiful Mind. He moved to Brooklyn, New York, with Connelly and her son Kai. The couple's own son, Stellan was born on 5 August 2003. Stellan's godfather is the actor Charlie Condou.