Paton was born in Pietermaritzburg, Natal Province (now KwaZulu-Natal), the son of a minor civil servant. After attending Maritzburg College, he earned a Bachelor of Science degree at the University of Natal in his hometown, followed by a diploma in education. After graduation, Paton worked as a teacher, first at the Ixopo High School, and subsequently at Maritzburg College. In1928 he married Dorrie Francis Lusted and they remained together until her death from emphysema in 1967.
Paton volunteered for service during World War II, but was refused. After the war he took a trip, at his own expense, to tour correctional facilities across the world. He toured Scandinavia, England, continental Europe, Canada, and the United States. During his time in Norway, he began work on his novel Cry, The Beloved Country, which he completed over the course of his journey, finishing it on Christmas Eve in San Francisco in 1946.
In 1948, four months after the publication of Cry, The Beloved Country, the National Party came to power in South Africa. In 1953 Paton founded the Liberal Party of South Africa, which fought against the apartheid legislation introduced by the National Party. He remained the president of the SALP until its forced dissolution by the apartheid regime in the late 1960s, officially because its membership comprised both blacks and whites.
Paton retired to Botha’s Hill where he resided until his death.