Pauker was born into Jewish family in Lviv, which was then part of Austria-Hungary. Prior to the war he was a hairdresser working in the Budapest Opera, according to Simon Sebag Montefiore. He served in the Austro-Hungarian army in World War I and was taken as a prisoner of war by the Russians in 1916. Pauker elected to stay in Russia after the revolution and joined the Communist Party in 1918.
He was dismissed in April 1937, according to Simon Sebag Montefiore, because he "knew too much and lived too well". He was arrested and executed quietly without trial in August 1937 and was not posthumously rehabilitated.