Pauley is a graduate of Longmont High School in Longmont, Colorado.
An eighth round pick by San Diego in 2001, Pauley posted a 7–12 record with a 4.17 ERA for the Padres A-class affiliate, the Lake Elsinore Storm, as their seventh best prospect in 2004.
On December 20, 2004, the Padres traded Pauley along with Jay Payton, Ramón Vázquez, and cash to the Boston Red Sox for Dave Roberts.
As a member of the Portland Sea Dogs rotation in 2005, he went 9–7 with 104 strikeouts and a 3.81 ERA in 156 innings pitched.
Pauley started 2006 in Portland. He posted a 2–3 with a 2.39 ERA in 10 starts for the Sea Dogs before making his major league debut on May 31 starting for Boston in place of the injured David Wells. He pitched 4⅓ innings against the Toronto Blue Jays and did not record a decision. In his 16 innings pitched for the Boston Red Sox, Pauley recorded a 7.88 ERA.
In 2007, Pauley was rated by Baseball America as the number 26 prospect in the Red Sox farm system. Pauley spent the entire 2007 season playing for the Pawtucket Red Sox. The Red Sox invited him to spring training in 2008, but was sent back to the minors on March 8, 2008. In January 2009, Pauley was designated for assignment in order to make room for the newly signed John Smoltz.
On January 19, Pauley was traded to the Baltimore Orioles for pitcher Randor Bierd.
On December 22, 2009, Pauley signed a minor league contract with the Seattle Mariners. On August 13, 2010, he earned his first major league win versus the Cleveland Indians.
On July 30, 2011, Pauley was traded to the Detroit Tigers along with Doug Fister for Charlie Furbush, Casper Wells, Chance Ruffin and minor leaguer Francisco Martinez. Pauley was released by the Detroit Tigers on March 12, 2012 and became a free agent after clearing waivers on March 15.
The Angels signed Pauley to a minor league contract on March 23, 2012. He was called up to the majors on May 7, 2012, but was designated for assignment on May 24. He cleared waivers and was then recalled to the Angels on June 12, 2012. He was designated for assignment a second time on June 18, and was claimed by the Toronto Blue Jays on June 20.
Pauley was claimed by the Blue Jays on June 20 after being designated for assignment by the Angels for a second time. For the Blue Jays, Pauley sported a 0-1 record with a 6.48 ERA in 10 relief appearances. He was designated for assignment after he gave up 3 earned runs, on 3 hits vs. the Kansas City Royals on July 2. On July 9, he elected free agency.
The Seattle Mariners signed him to a minor league contract on July 12, and assigned him to the Triple-A Tacoma Rainiers on July 14. On August 24, 2012, it was announced Pauley had violated drug agreement while in Triple-A. He was suspended 50 games.
On June 10, 2013, Pauley signed a minor-league deal with the Arizona Diamondbacks and was assigned to Triple-A Reno. After pitching in 4 games for the Aces, Pauley was released by the team. In those 4 games, he went 0-1, giving up 10 hits and 7 runs in 5.2 innings.
On July 25, 2013, Pauley signed with the independent Sugar Land Skeeters of the Atlantic League of Professional Baseball. In 12 starts, he went 5-3 with a 3.44 ERA, striking out 52 in 68 innings. He became a free agent after the 2014 season.
Pauley is a sinkerball pitcher, and as such his success relies on his ability to keep the ball down in the strike zone, and when contact is made, to get ground-ball outs. Pauley also has the standard fastball, curveball, and changeup in his repertoire. His fastball hits the high 80 MPH range and his curveball has more of a sweeping motion than the standard 12-to-6 movement seen from most minor-league pitchers.