He is known for the Pauly reaction, a chemical test used for detecting the presence of tyrosine or histidine in proteins.

His father was Friedrich Hermann Pauly, a mine director, and his mother was Henriette Wintgens (or Wittgens).

[2][4] Pauly worked for a short period at Schering AG in Berlin, then became a research assistant to Hermann Emil Fischer at the Friedrich-Wilhelms-Universität.

[2][a] He correctly confirmed the finding of Thomas Aldrich that the formula for adrenaline was C9H13NO3 despite the fact that he was not working with pure samples, which only emerged much later.

[9] In 1904 he published a paper that described what became known as the Pauly reaction, a method of detecting the presence of the amino acids tyrosine or histidine in proteins.