Thompson started his National Hockey League career with the New York Rangers in 1926. He also played for the Chicago Black Hawks and retired after the 1939 season. He was a member of the season-ending NHL All-Star team twice as a player and twice as a coach. He was a three-time winner of the Stanley Cup, winning it in 1928 with the Rangers, and in 1934 and 1938 with Black Hawks.
Thompson faced his brother Tiny in the 1929 Stanley Cup Finals, marking the first time a set of brothers faced each other in a goaltender-forward combination in Stanley Cup Finals history. Paul's Rangers were swept by Tiny's Boston Bruins. Tiny said of the matchup: "When I played goal for Boston against Paul (in) the final of 1929, he was just a rookie. It was really no contest."[1]
After retiring from playing, Thompson became a professional coach, notably coaching the Chicago Black Hawks between 1939 and 1945, and the Vancouver Canucks of the Pacific Coast Hockey League (PCHL), between 1945 and 1947.