Paulson was born on December 17, 1974, in Tampa, Florida, the daughter of Catharine Gordon (née Dolcater) and Douglas Lyle Paulson II. She spent her early life living in South Tampa until her parents' divorce when she was five years old. After her parents' separation, Paulson relocated with her mother and sister to Maine, then to New York City.
Her mother worked as a waitress, and Paulson lived in Queens and Gramercy Park, before settling in Park Slope, Brooklyn. She recalled of this period: "My mom was 27 years old (when we moved). She didn't know a single person in New York City. She got a job at Sardi's Restaurant... She was so brave to be basically a debutante in Tampa, Florida, having a cotillion and a coming out ball—and she picked up and brought her two kids to the greatest city in the world, not knowing anyone. My mom's kind of my hero that way."
Throughout her childhood, Paulson spent her summers in Florida staying with her father, who was an executive at a Tampa door manufacturing company.