Shanley first gained notoriety during the 1970s as a "street priest", ministering to drug addicts and runaways who struggled with their sexuality. His writings included Changing Norms of Sexuality. During the 1980s, Shanley served as pastor of St. Jean the Evangelist Parish in Newton. In 1990, he was transferred to St. Anne's in San Bernardino, California. While there he and another priest, John J. White, co-owned "a bed-and-breakfast for gay customers 50 miles away in Palm Springs".
Shanley had earned "the nickname the hippie priest for his long hair and outspoken views, including his public rejection of the church's condemnation of homosexuality." He attended a conference on sexuality where the founders of NAMBLA, the North American Man Boy Love Association, conceived the idea of such an organization. However, Shanley was not a part of the 32 individuals at the meeting who caucused to form the group, according to a Catholic priest and Protestant minister who were.
According to Leon Podles in his book Sacrilege: Sexual Abuse in the Catholic Church, "In late 1993, Shanley was sent to the Institute of Living in Hartford, Connecticut, for evaluation. The Boston archdiocese has refused to release this evaluation, but other released files show that Shanley admitted to nine sexual encounters, of which four involved boys, and that he was diagnosed as 'narcissistic' and 'histrionic'. Shanley admitted that he was 'attracted to adolescents' and on the basis of this confession, the Boston archdiocese secretly settled several lawsuits against Shanley. The archdiocese of Boston in 1993 had to admit to the diocese of San Bernardino part of the truth about Shanley, and the bishop of San Bernardino immediately dismissed him."
In February 2005, Shanley was found guilty of indecent assaults and the rape of a male minor and received a sentence of 12 to 15 years in prison. Shanley's case remains controversial because the allegations of abuse came only after the victim (now an adult) alleged that he "recovered" memories of the abuse from approximately 20 years earlier. The notion of "repressed memory" is highly controversial and has been excluded from several courts of law. The manner in which the accusations against Shanley arose and enormous attention in the media also have given rise to questions about the validity of the convictions.
In 2007, Shanley's new attorney, Robert F. Shaw, Jr., filed motion for a new trial on his behalf challenging his convictions as unjust. During a hearing in May 2008, Shaw forcefully argued that repressed memories of childhood rape and sexual assault by family and clergy were without general acceptance in the scientific community, were so-called "junk science," and that the court had not been presented with accurate information about the scientific status of repressed memories before trial. Shaw argued that Shanley is entitled to a new trial.
On November 26, 2008, Superior Court Judge Stephen Neel denied Paul Shanley's motion for a new trial. Shaw responded by filing a petition for review of the case in the Supreme Court of Massachusetts (known as the Supreme Judicial Court), arguing that the judge had erred, and that "repressed memory" is an unproven, hypothesized phenomenon that has not been accepted in the scientific community and should not be admitted as evidence in Massachusetts courts. In January 2009, the Supreme Judicial Court granted the petition and ordered the case transferred from the intermediate appellate court for review by the state’s highest court.
On September 10, 2009 the Supreme Judicial Court heard arguments in the case. Robert F. Shaw, Jr. argued that Paul Shanley was prosecuted, convicted and imprisoned based upon inadmissible evidence. The case was closely watched throughout the United States and abroad.
On January 10, 2010, the Supreme Judicial Court of Massachusetts unanimously affirmed Shanley's conviction. The court concluded: "In sum, the judge's finding that the lack of scientific testing did not make unreliable the theory that an individual may experience dissociative amnesia was supported in the record, not only by expert testimony but by a wide collection of clinical observations and a survey of academic literature. ... There was no abuse of discretion in the admission of expert testimony on the subject of dissociative amnesia."
Shanley was released from Old Colony Correctional Center on July 28, 2017, after serving 12 years. He is subject to supervised probation for another ten years.