Castellano was born in Bensonhurst, Brooklyn in 1915, to Italian immigrants Giuseppe and Concetta Castellano (née Casatu). Giuseppe was a butcher and an early member of the Mangano crime family, the forerunner of the Gambino family. Castellano dropped out of school in the eighth grade to learn butchering and collecting numbers game receipts, both from his father. In July 1934, Castellano was arrested for the first time in Hartford, Connecticut for robbing a haberdasher. The 19-year-old Castellano refused to identify his two accomplices to the police and served a three-month prison sentence. By refusing to cooperate with authorities, Castellano enhanced his reputation for mob loyalty.

Castellano’s sister Catherine had married one of their cousins, future Mafia boss Carlo Gambino, in 1926. In 1937, Castellano married his childhood sweetheart Nina Manno; the couple had three sons (Paul, Philip, and Joseph Castellano) and a daughter, Constance Castellano; Manno would later die in 1999. His nephew was actor Richard S. Castellano from The Godfather.

In 1957, after Anastasia’s homicide and Carlo Gambino’s elevation to boss, Castellano attended the abortive Apalachin meeting in Apalachin, New York. When New York State Police raided the meeting, Castellano was one of 61 high-ranking mobsters arrested. Refusing to answer grand jury questions about the meeting, Castellano spent a year in prison on contempt charges. On January 13, 1960, Castellano was sentenced to five years in prison for conspiracy to withhold information. However, in November 1960, Castellano’s conviction was reversed by an Appeals Court.

In 1975, Castellano allegedly had Vito Borelli, the boyfriend of his daughter Constance, murdered because he heard Borelli had compared him to Frank Perdue, the owner and commercial spokesman for Perdue Farms. Castellano was so insulted, he personally ordered the killing. In 2004, court documents revealed that Joseph Massino, a government witness and former Bonanno crime family boss, admitted murdering Borelli as a favor to Castellano.

On October 15, 1976, Carlo Gambino died at home of natural causes. Against expectations, he had appointed Castellano to succeed him over his underboss Aniello “Neil” Dellacroce. Gambino appeared to believe that his crime family would benefit from Castellano’s focus on white collar businesses. Dellacroce, at the time, was imprisoned for tax evasion and was unable to contest Castellano’s succession.

In 1978, Castellano allegedly ordered the murder of Gambino associate Nicholas Scibetta. A cocaine and alcohol user, Scibetta participated in several public fights and insulted the daughter of George DeCicco. Since Scibetta was Salvatore “Sammy the Bull” Gravano’s brother-in-law, Castellano asked Frank DeCicco to first notify Gravano of the impending hit. When advised of Scibetta’s fate, a furious Gravano said he would kill Castellano first. However, Gravano was eventually calmed by DeCicco and accepted Scibetta’s death as the punishment earned by his behavior.

In 1978, Castellano allegedly ordered the murders of Gambino capo James Eppolito and his son, mobster James Eppolito, Jr. Eppolito, Sr. had complained to Castellano that Anthony Gaggi was infringing on his territory and asked permission to kill him. Castellano gave Eppolitto a noncommittal answer, but later warned Gaggi about Eppolito’s intentions. In response, Gaggi and soldier Roy DeMeo murdered Eppolito senior and junior.

In February 1978, Castellano made an agreement between the Gambino family and the Westies, an Irish-American gang from Hell’s Kitchen, Manhattan. Castellano wanted hitmen that law enforcement could not tie directly to the Gambino family. The Westies wanted Gambino protection from the other Cosa Nostra families. The Gambino–Westie alliance was set in a meeting between Westies leader James Coonan and Castellano. According to Westies gangster Mickey Featherstone, Castellano gave them the following directive:

In September 1980, Castellano allegedly ordered the murder of his former son-in-law Frank Amato. A hijacker and minor criminal, Amato had physically abused his wife Connie Castellano (Paul’s daughter) when they were married. According to FBI documents, Gambino soldier Roy DeMeo murdered Amato, cut up his body, and disposed of the remains at sea.

In 1981, Castellano met twice with businessman Frank Perdue, the alleged cause of the 1975 Borelli murder. Perdue wanted Castellano’s help in thwarting a unionization drive at a Perdue facility in Virginia. However, according to Perdue, the two men talked, but never agreed to anything.

In January 1983, Castellano allegedly ordered the murder of Roy DeMeo, who was found shot to death in the trunk of his Cadillac automobile. In March 1983, the FBI obtained a warrant to install secret listening devices in Castellano’s house. Waiting until Castellano went on vacation to Florida, agents drugged his watch dogs, disabled his security system, and planted devices in the dining and living rooms. These devices provided law enforcement with a wealth of incriminating information on Castellano.

In August 1983, Angelo Ruggiero and Gene Gotti were arrested for dealing heroin, based primarily on recordings from a bug in Ruggiero’s house. Castellano, who had banned made men from his family from dealing drugs under threat of death, demanded transcripts of the tapes, and, when Ruggiero refused, threatened to demote Gotti.

On March 30, 1984, Castellano was indicted on federal racketeering charges in the Gambino case, including the Eppolitto and DeMeo murders. Other charges were extortion, narcotics trafficking, theft, and prostitution. Castellano was released on $2 million bail.

On February 25, 1985, Castellano was one of many Mafia bosses arrested on charges of racketeering, which was to result in the Mafia Commission Trial; he was released on $3 million bail.

On July 1, 1985, Castellano was indicted on loansharking charges and with tax evasion for not reporting the profits from his illegal racket, and pleaded not guilty.

On November 4, 1985, in a testimony from car thief Vito Arena, Castellano was named the head of the stolen-car ring that employed him, as well as having been connected to five murders.

Dellacroce died of cancer on December 2, 1985 which started a chain of events that led to Castellano’s murder two weeks later. Several factors contributed to the conspiracy to kill Castellano; his failure to attend Dellacroce’s wake was an insult to the Dellacroce family and his followers. Secondly, Castellano named his bodyguard Thomas Bilotti as the new underboss. A Castellano loyalist, Bilotti was a brutish loanshark with little of the diplomatic skill required as underboss. Castellano also hinted that he was breaking up Gotti’s crew.

Two weeks after Castellano’s murder, a meeting of capos in a Manhattan basement elected Gotti, age 45, as the new Gambino boss. The Castellano murder enraged Vincent Gigante, boss of the Genovese crime family, because Gotti never received permission for the act from the Commission. Gigante solicited the help of Lucchese crime family boss Anthony Corallo to kill Gotti. On April 13, 1986, a car bomb meant for Gotti exploded outside a Bensonhurst social club, but the only casualty was Frank DeCicco. Afterward, Gotti and Gigante called a truce.

Gotti was arrested by the FBI in late 1990 on racketeering charges and denied bail 10 days later. On April 2, 1992, with the help of Gravano becoming a government witness, Gotti was convicted of numerous racketeering charges, including the 1985 Castellano murder. On June 23, Gotti was sentenced to life in federal prison, where he died of throat cancer in 2002. No one else was ever charged in the Castellano murder.