Paul had 18 points, nine assists and five steals, James Posey scored nine of his 15 points in the fourth quarter, and the Hornets beat the Grizzlies 91-84 on Tuesday night.
The loss snapped Memphis' four-game winning streak, its longest of the season. The Hornets won for the fifth time in six games despite struggling from the field at times.
"We toughened up at the end and got five big stops in a row," New Orleans coach Byron Scott said. "We made some key baskets. The defense the last few minutes of the game was the key to the victory."
David West also scored 18 points, but shot 5-of-16. Paul was just 3-of-10 from the field but made 11 of 12 free throws.
New Orleans led by 15 in the first half, but Memphis capitalized on the Hornets' poor shooting to tie it at 81 with 3:18 left. A 3-pointer by Peja Stojakovic from the left corner with the shot clock running down put New Orleans up to stay at 84-81 with 2:52 remaining. That allowed the Hornets to close the game on a 10-3 run.
"Peja's big 3 in the corner hurt us," said Gay, who added that 6-foot-1 Memphis point guard Mike Conley, "played good D on him, but Peja's 6-10. He's one of the best shooters in NBA history, and he's been hitting those for years."
New Orleans beat Memphis 106-87 on Dec. 6 after building a 37-16 lead after the first quarter. While not quite as bad, Memphis again fell behind early on Tuesday. The Grizzlies missed their last 10 shots of the first quarter, failed to score in the final 6:48 of the period after tying the game at 11, and the Hornets closed the period with 15 straight points.
Unlike the game in New Orleans, Memphis didn't quit and cut into the lead during the second period, then benefited from poor shooting by New Orleans, including 19 percent in the third.
"We just got discombobulated on the offensive end," West said, "but we were able to settle down defensively. We were able to maintain our composure and make key plays down the stretch to win the game."
The game was testy, with West receiving a technical for slamming the ball down when he didn't get a call. Tyson Chandler's fifth foul was accompanied by a technical when he swiped at Grizzlies guard Kyle Lowry, who had grabbed Chandler's waist fighting through a pick.
By the end, Memphis coach Marc Iavaroni and Scott were mouthing at each other down the sideline. Scott declined comment about the exchange after the game.
Despite shooting 24 percent in the first quarter, the Grizzlies stayed close behind 16 points from Gay and 12 from Mayo. The Grizzlies made 11 of 14 shots in the second period to cut into the lead.
Paul had eight points despite 1-of-5 shooting as the Hornets used balanced scoring to build a 49-42 halftime lead. New Orleans was 16-of-23 at the free throw line, compared to Memphis' 9-of-11.
The Hornets were just 3-of-16 in the third but carried a 61-60 lead into the final stanza.
"[The Grizzlies] were doing a good job of being aggressive on the screen-and-rolls," Paul said of the Hornets' third-quarter shooting woes. "A lot of it was we weren't making shots. [Their] pick-and-rolls really hurt us in that quarter. O.J. Mayo got going, and so did Rudy."
But in the fourth quarter, with the game on the line, Posey continually hit shots to keep the Hornets close or ahead of Memphis until Stojakovic's 3-pointer kick-started the Hornets' winning surge.
"They played a great all-around game," Paul said. "But, as a team, we feel like we've been through a lot of things, and we were able to pull it together in the fourth."
The Hornets are now 14-1 when leading after three quarters. The victory was the Hornets' seventh straight in the series. New Orleans has won 11 of the last 12 against the Grizzlies. The 11 first-quarter points for Memphis was a season-low for any period this season. The Hornets have held eight of their last 11 opponents to 95 points or less. They are 9-2 in those 11 games. Memphis scored at least 100 points in all four games of its winning streak.