Born in Tölvänniemi (parish Iisalmi) as the oldest son of plain farmers, he received his first bible at age six. At the time of his confirmation he had already read it three times, and always thought about the words of the bible which gained him the nickname foolish Paavo. When he heard about the lay pastor Jakob Högman in Jyväskylä, he instantly walked the 200 km to Jyväskylä. This visit laid the foundation of his religious life.
Paavo Ruotsalainen became the leading of the revivalist movement in Finland. He traveled around Finland to meet with other members of the movement, most notably the priests Jonas Lagus and Nils Gustav Malmberg in Pohjanmaa - it is estimated that he traveled 40,000 km altogether, most of it on foot. With the spreading of the movement, both church and state authorities became worried about it. In 1838/39 he was put on trial and fined, yet this could not stop the movement.
His religious activities made his private life more difficult — his first wife could not understand his activities, his oldest son was even murdered by opponents of the movement.
He was an ardent opposer of narrow-minded sectarians who emphasized a strict code of conduct as integral to a chaste Christian life. Famously he drank a two liter bottle of clear spirits on the market square of Mikkeli. Although apart from this occurrence, he was himself a teetotaller, this act served as a powerful demonstration against the dictum that one could be justified by good action, rather than faith; and against the view that some Christians were better than others, rather than all sinners together, saved by divine grace alone.
Ruotsalainen died in Nilsiä.