He became a student at the Swedish-language lyceum in Mikkeli in 1881 and graduated with a bachelor's degree in philosophy in 1888 and worked from the following year until 1890 as a researcher with the Mokshas and Erzyas.

[5] Paasonen made research trips to the Finno-Ugric peoples, including Hungary, collecting linguistic and ethnographic material.

In 1902 he became the Chief Inspector of the School Board, and professor of Finno-Ugric linguistics at the University of Helsinki from 1904 to 1919.

The collection Mordwinische Volkslieder I-IV was published by Paavo Ravila from 1938 to 1947, and the dialect dictionary of Mordvinic languages based on Paasonen's materials, H. Paasonens Mordwinisches Wörterbuch[7] was edited since the 1930s and finally published in 1990 to 1996; it became the basis of lexicological research in these languages.

Paasonen's spouse since 1894 was Hungarian-born Mariska Paskay de Palásth.