Paul Lill was born on 25 January 1882 to a family of a miller in Veski farm in Roobe Parish (now part of Tõrva Parish), Estonia, then part of the Governorate of Livonia of the Russian Empire. He studied 1891–1892 in Jõgeveste and 1892–1894 in Helme parish schools, and 1894–1899 in Valga town school.[1]
After release, Lill joined the Estonian Army engaged in the Estonian War of Independence, and became Chief of Operations Section of Operations Staff on 18 December 1918. In February 1919 he became temporary, and in May a permanent, Chief of Administrative Agency. In April Lill was promoted to rank of lieutenant-colonel, and in October to rank of colonel, becoming also a member of the War Council and commander of the Reserve Forces. For his service during the War of Independence, Paul Lill was awarded Estonia's Cross of Liberty and Latvia's Order of Lāčplēsis, as well as a farm and 300,000 marks.[3]
After the war Lill continued military service, becoming initially acting, and from October 1920 permanent Chief of Staff of the Defence Forces. In December 1921 he was promoted to rank of major general and became a member of the War Council. In January 1925 Lill became Undersecretary of the Minister of War, position which he held for the next 9 years.[3] In 1933 he became Minister of Defence (from 1937 titled again Minister of War). In January 1938 Lill became member of the National Defense Council, and in February was promoted to rank of lieutenant general, becoming the third Estonian officer to reach the rank. During his service as a Minister of War, Lill also had to repeatedly temporarily fulfill duties of Minister of Interior and Minister of Roads.[5] On 12 October 1939 Paul Lill resigned as Minister of War, citing unacceptable conditions of the Bases Treaty with Soviet Union.[4][6]
Lill was the chairman of SK Tallinna Sport club, and member of Korporatsioon Sakala, State Decorations Council, War of Independence Memorial Council, Cross of Liberty Brothers Society, and Mulgi Society.[1][5]
In October 1940 Soviet occupation authorities revoked Lill's retirement pension, and in December evicted him from his apartment at so-called "generals house" at Gonsiori street. Afterwards he completed an accountancy course and tried to find a job. On 14 June 1941 he was arrested by NKVD and deported to Russia together with his sister Olga. Paul Lill died in a prison camp in Sverdlovsk Oblast on 13 May 1942, his place of burial is unknown.[5][6]