She is the eldest of four children born to Richard Hilton and Kathy Richards. Her younger sister is Nicky Hilton, and her younger brothers are Barron Hilton and Conrad Hilton.

On the maternal side of her family, Hilton is a niece of two popular child stars of the 1970s, Kim Richards and Kyle Richards, who appeared in the motion picture Escape to Witch Mountain and TV shows like Nanny and the Professor, Little House on the Prairie, and later, ER. By marriage, she also is related to Zsa Zsa Gabor (the Hungarian-born actress who married Paris Hilton's great-grandfather Conrad Hilton) as well as Elizabeth Taylor (the actress's first husband was Paris Hilton's great-uncle, Conrad Nicholson Hilton Jr.).

Her paternal grandparents are hotel chairman Barron Hilton and his wife, the former Marilyn Hawley, and her paternal great-grandparents were Hilton Hotel founder Conrad Hilton and his first wife, Mary Barron. When Conrad Hilton died in 1979, he left nothing in his will to his children or other descendants. Barron Hilton contested this decision and won in 1988. According to Forbes magazine in 2005, the net worth of Barron Hilton is estimated at just over US $1 billion, of which Paris is expected to inherit a little over US $50 million.

Hilton moved between several exclusive homes in her youth, including a suite in the Waldorf-Astoria Hotel in Manhattan, Beverly Hills, and the Hamptons. Currently, her parents own a $10 million mansion in Bel Air, a $6.3 million estate in the Hamptons, as well as $3 million house in the Hollywood Hills in which she and her sister stay to give them privacy and easy access to LA clubs.

After attending high school at the Dwight School in New York, but dropping out and eventually earning a GED, Hilton decided not to attend a university. Instead, she worked as a fashion model for Catherine Malandrino and Marc Bouwer, and on an ad campaign for Italian label Iceberg. She appeared in cameo roles in Zoolander (2001), The Cat in the Hat (2003) and Win a Date with Tad Hamilton! (2004).

What really shot Hilton to prominence was a sex video of her with her then-boyfriend Rick Salomon, which was leaked onto the Internet shortly after The Simple Life debuted, causing a sensation. On June 9, 2004 it was released as a DVD titled 1 Night in Paris which was hosted by Salomon. Hilton sued Salomon for releasing the tape, but the suit was settled, with Hilton receiving US $400,000 and a percentage of the profits.
In recent years Hilton has gained recognition by appearing in television, movies, commercials, and modeling. According to Forbes magazine, in 2003-2004 she earned approximately US$2 million for her television and movie roles, but in 2004-2005 her earnings from television, movies, modeling, and personal appearances have earned her an additional $6.5 million. During this period Forbes Magazine has ranked Hilton as one of the top 100 celebrities in the world.

She also appeared in the short subjects QIK2JDG and L.A. Knights, as well as minor and supporting roles in the feature movies House of Wax, The Hillz, Wonderland, Uptown Girls, Raising Helen and Nine Lives. She landed her first lead role in a theatrical release with National Lampoon's Pledge This! (2005).

Hilton and Nicole Richie (daughter of Lionel) starred in the 2003 FOX hit reality series The Simple Life, in which they lived with a family on their farm in rural Altus, Arkansas. Highlights of the show included the girls performing poorly at various jobs, making out with the local boys, and numerous instances of them shown as "fish out of water." On March 19, 2004, Hilton suffered a horseback riding accident while filming The Simple Life 2, requiring treatment at a hospital. Following the success of the first season of the show, Hilton is now being paid around US$3 million per season.

In April 2005, however, Hilton announced that she severed both personal and professional ties with Richie[2]. Neither party has commented on the reason why, though Hilton has alluded that it is due to actions on the part of Richie. Unconfirmed reports suggest that Hilton hosted a party to watch her performance as host of Saturday Night Live, but that Richie switched the SNL tape with a tape of Hilton's infamous sex video.