Born and raised in Pasadena, California, Fussell was the second of three children. His father, Paul Fussell (1895–1973), son of a widowed schoolteacher, became a corporate lawyer in Los Angeles with the firm of O’Melveny & Myers. His mother, Wilhma Wilson Sill (1893–1971), was the daughter of a carriage trimmer in Illinois. His brother, Edwin Sill Fussell, was an author, poet, and professor of American Studies at the University of California, San Diego; his sister Florence Fussell Lind lives in Berkeley, California.  His daughter, Rosalind, is an artist-teacher in Arizona and the author of a graphic novel, Mammoir: A Pictorial Odyssey of the Adventures of a Fourth Grade Teacher with Breast Cancer. His son, Samuel Wilson Fussell, a writer and hunter in Montana, is the author of Muscle: Confessions of an Unlikely Bodybuilder.

Fussell attended Pomona College from 1941 until he enlisted in the US Army in 1943. He landed in France in 1944 as a 20-year-old second lieutenant with the 103rd Infantry Division (45th Infantry Division, according to Fussell in his article on the Atom bomb in The New Republic, 1981) and was wounded while fighting in Alsace, and was awarded the Bronze Star and Purple Heart. He was honorably discharged from the Army in 1946, returned to Pomona to finish his B.A. degree in 1946-7, married fellow Pomona graduate Betty Harper in 1949, and completed his MA (1949) and PhD (1952) at Harvard University.

He began his teaching career at Connecticut College (1951–55) before moving to Rutgers University in 1955 and finally the University of Pennsylvania in 1983. He also taught at the University of Heidelberg (1957–58) and King’s College London (1990–92). As a teacher, he travelled widely with his family throughout Europe from the 1950s to 70s, taking Fulbright and sabbatical years in Germany, England and France.  Betty Fussell has described their marriage and its breakup in 1981 in her memoir, My Kitchen Wars. After Fussell moved from his home in Princeton, New Jersey, to Philadelphia, Pennsylvania, he divorced Betty and married Harriette Behringer. He retired from the University of Pennsylvania in 1994 and lived with his wife in Oregon.

When he first entered college, Fussell intended a career in journalism. His plans changed when his sergeant was killed beside him in combat, about which he wrote in his memoir Doing Battle (1996). In his writings, he opposed war promoting instead a vision of rational enlightenment. He pointed to what he saw as the hypocrisy of governmental speech and the corruption of popular culture.  His published thesis, Theory of Prosody in Eighteenth-Century England, was developed into Poetic Meter and Poetic Form (1965), a popular textbook for understanding poetry. Samuel Johnson and The Life of Writing (1971) offered an analysis of the work of the English lexicographer, Samuel Johnson. The Anti-Egotist, Kingsley Amis: Man of Letters was a study of the life and work of friend and colleague, Kingsley Amis.

The award-winning The Great War and Modern Memory (1975) was a cultural and literary analysis of the impact of the Great War on the development of modern literature and modern literary conventions. John Keegan said its effect was “revolutionary”, in that it showed how literature could be a vehicle for expressing the experience of large groups. “What Paul did was go to the literary treatments of the war by 20 or 30 participants and turn them into an encapsulation of a collective European experience”.  Abroad: British Literary Travelling Between the Wars (1980) was a pioneering academic examination of travel literature which examined the travel books of Evelyn Waugh, Graham Greene, D. H. Lawrence and Robert Byron.

Fussell stated that he relished the inevitable controversy of Class: A Guide Through the American Status System (1983) and indulged his increasing public status as a loved or hated “curmudgeon” in the rant called BAD: or, The Dumbing of America (1991). In between, Thank God for the Atom Bomb and Other Essays (1988) confirmed his war against government and military doublespeak and prepared the way for Wartime: Understanding and Behavior in the Second World War (1989). The epiphany of his earlier essay, “My War”, found full expression in his memoir Doing Battle: The Making of a Skeptic (1996), “My Adolescent illusions, largely intact to that moment, fell away all at once, and I suddenly knew I was not and never would be in a world that was reasonable or just”. The last book by Fussell published while he was alive, The Boys’ Crusade: The American Infantry in Northwestern Europe, 1944–45 (2003) was once again concerned with the experience of combat in World War II.

Fussell died of natural causes on 23 May 2012 at a long-term care facility in Medford, Oregon. He had previously lived in Portland, Oregon for two years. He was 88.