Paglia was born in Boville Ernica, Frosinone, Italy. He was educated at the Pontifical Roman Minor and Major Seminary. He earned a Licentiate in Philosophy and a degree in Theology from the Pontifical Lateran University, Rome. He also earned a Master's degree in Pedagogy from the University of Urbino, Italy. As a student in 1968 he was one of the co-founders of the Community of Sant'Egidio, an association of lay Catholics. He was ordained a priest for the diocese of Rome on 15 March 1970 and served as a curate in Casal Palocco from 1970 to 1973. Later he was rector of the Church of Sant'Egidio in Trastevere. From 1981 to 2000 he was pastor of the Basilica parish of Santa Maria in Trastevere. There he 1982 he initiated the annual Christmas lunch for the homeless and the poor, a project of the Community of Sant'Egidio held inside the church. On 4 March 2000 Pope John Paul II appointed him bishop of Terni-Narni-Amelia. He received episcopal consecration from Cardinal Camillo Ruini on 2 April and took possession of the diocese on 16 April. In September 2002 John Paul named him President of the Catholic Biblical Federation. From 2004 to 2009 he was chairman of the Commission for Ecumenism and Dialogue of the Italian Episcopal Conference, and from 2009 until 2012 he was president of the Episcopal Conference of Umbria. As President of the Conference of Bishops of Umbria, he promoted the Solidarity Fund, an initiative that provides economic support for families particularly affected by the recent economic crisis. He was ecclesiastical advisor of the Community of Sant'Egidio. He was the first priest to enter Albania after the elections in March and April 1991. He successfully negotiated the re-opening of the seminary and the return of the cathedral, and he paved the way for relations between Albania and the Holy See. In December 2010, the town of Narnia sold a castle to an Italian investment group whose head was also a financial officer of Paglia's diocese. A government investigation into the transaction found Paglia had not been involved. On 6 January 2011 he was named one of the first members, for a five-year renewable term, of the Pontifical Council for Promoting the New Evangelization. He has been responsible for inter-religious dialogue and has opposed a cooling of relations with Jewish leaders.
On 26 June 2012 Pope Benedict XVI named him President of the Pontifical Council for the Family and raised him to the rank of archbishop. In February 2013 he noted in an interview that homosexual couples should be safe from unjust discrimination in countries where homosexual acts are illegal. He later said that he was not suggesting a change in church doctrine and that he was restating the official teaching of the Church. As President of the Pontifical Council for the Family he was responsible for the Church's triennial World Meeting of Families. His tenure as head of the Pontifical Council on the Family ended when that department's functions were taken over by the new Dicastery for the Laity, Family and Life on 1 September 2016.