Reiser attended the East Side Hebrew Institute and graduated from Stuyvesant High School. He earned his bachelor's degree at Binghamton University, where he majored in music, especially piano and composition.
During his university years, Reiser was active in student theater productions at the Hinman Little Theater, an on-campus community theater organization located in Hinman College, Reiser's dorm community.
After developing his skills as a stand-up comedian, Reiser had a breakout film role in 1982 when he appeared in Diner, a coming-of-age film directed by Barry Levinson. He followed this success by playing a detective in Beverly Hills Cop in 1984, a role he reprised in its sequel, Beverly Hills Cop II. Reiser also had roles in James Cameron's Aliens, in which he played the corrupt Carter Burke; The Marrying Man and Bye Bye Love.
Reiser starred as one of two possible fathers of a teenage girl in the TV sitcom My Two Dads, and later came to prominence in North America as Paul Buchman in Mad About You. He was also the co-composer of the show's theme song, "The Final Frontier", and performed the piano for the theme's recording.
In 2001, Reiser played a dramatic role as a man desperate to locate his biological mother, after learning he has a serious illness, in the British TV film My Beautiful Son. In 2002, Reiser made a guest appearance as himself on Larry David's HBO sitcom, Curb Your Enthusiasm. In 2010, Reiser collaborated with the singer Julia Fordham to create a CD album titled Unusual Suspects, which includes the song "UnSung Hero", dedicated to American soldiers serving in Afghanistan.
Reiser scripted and starred in the semi-autobiographical comedy series The Paul Reiser Show, which aired on NBC as a mid-season replacement during the 2010–2011 TV season.
Reiser has written three books: Couplehood, about the ups and downs of being in a committed relationship; Babyhood, about his experiences as a first-time father; and Familyhood, a collection of humorous essays.
Reiser married Paula Ravets on August 21, 1988. They have two sons: Ezra Samuel and Leon.