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Oestreich was born in Kolberg, within the German Empire's Prussian Province of Pomerania. He studied mathematics, philosophy, pedagogy, and new languages at the universities of Berlin and Greifswald from 1896-1900.
In Berlin-Schöneberg, Oestreich was a teacher from 1901 and a Studienrat from 1905. He joined the National-Social Association and the Liberals Association to Friedrich Naumann, which he represented 1906-08 in the Berlin City Council, then the Democratic Union. He became a member of the "Federal New Fatherland", and later, in 1921- 1926 he was a board member of the "German Peace Society". From 1918 till 1931 he was a member of the SPD. 
In 1919, Oestreich founded the Bund Entschiedener Schulreformer (BESch) and led it until 1933. From 1945-1949, Oestreich was Hauptschulrat in Berlin-Zehlendorf. From 1949 to 1950 he worked in the Hauptschulamt of the Magistrat of Groß-Berlin Dezernent for higher education. In 1949 he became a head of the 29 higher schools in east Berlin.
In autumn of 1954 he received the award "Verdienter Lehrer des Volkes" by the Soviet Council of Ministers.
Paul-Oestreich-Straße is a street named after Oestreich in Berlin-Weißensee.
- An editor of the "Neue Erziehung" (bulletin of the Bund Entschiedener Schulreformer)
- Die Produktionsschule, 1920
- Die Einheitsschule als Schule d. Menschenbildung, 1920;
- Die elastische Einheitsschule, 1921
- Die Produktionsschule als Nothaus u. Neubau, 1924;
- Der neue Lehrer, 1926 (with O. Tacke);
- Erziehung zur Liebe, 1930 (with E. Dehmel);
- Der Einbruch d. Technik in d. Pädagogik, 1930;
- Die Technik als Luzifer der Pädagogik, 1947
- Die Schule zur Volkskultur, 1947
- Paul-Oestreich-Straße (in German)
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