He was a spiritual seeker from a very young age. When he was a small boy he saw a picture of Buddha as a skeletal ascetic and began to starve himself. His father had to take him to a doctor to make him eat again.
His first samadhi occurred when he was eight or nine. Since he lived in a Moslem part of India, he was taken to the local mosque, where his trance was diagnosed as possession.
Poonja grew up in an Indian town (red dot) that is now in Pakistan.
The samadhi lasted several days. After it ended, in an effort to re-experience it, he followed his mother's example and became a devotee of Krishna, chanting mantras for hours each day. His mantra practice continued until he reached his mid-thirties.
At age twenty, his marriage was arranged to a Brahmin girl, and he entered the army as an officer. Within a few years the couple had two children, Surendra and Surendri.
While in the army, Poonja woke up at two a.m. to seek visions of Krishna. They often occurred, but the experiences weren't permanent, and he felt a painful sense of separation from God. He decided to leave the army so he could search for a guru who could help him stabilize permanently in a state of awareness of God.
Poonja's uncle, Swami Rama Tirtha, was a famous saint.
He moved his family into his father's house, resigned his commission, and left home to look for a guru. His search ended when he met Ramana Maharshi, who pointed out to him that visions of Krishna come and go, but the seer — the one who sees Krishna — is permanently present. "God cannot be an object that appears and disappears," said Sri Ramana, "so find out who the seer is."
As Poonja later recalled:
For the first time ever I heard, "Find out who the seer is."
With the master [Sri Ramana], I got the experience. This experience was already here. When we love God, we think he is an object. But he is the subject. So you have to surrender to the subject. The ego is the object.
“God cannot be an object that appears and disappears,” said Sri Ramana, “so find out who the seer is.”
You merge into the subject so that no object is left behind. God will speak, God will walk, and God will see. I got this from my master. I saw the seer. I realized the seer through my master, and I prostrated before him.1 1. Wake Up and Roar Vol. 1, p. 124
Poonja took a job in Madras for four years so he could visit Ramana's ashram on weekends. After Ramana died in 1950, Poonja worked for a mining company in southern India. After his retirement in 1965, he moved to Lucknow in northern India, where his wife and children had lived since 1947.
Even before his retirement he had begun to develop a reputation as a self-realized man and guru. In 1966 he began to travel in India, Europe, and North America, and his reputation grew.
Poonja's devotees called him "Papaji".
In the late 1980s, several prominent American meditation teachers visited him including Ram Dass, Jack Kornfield, and Joseph Goldstein.
In 1990, Osho died and many of his followers began to visit Poonja instead. The number of visitors grew so large that a satsang hall had to be built near Poonja's house.
Just before he died in 1997, he asked the people in his hospital room, "Where is Buddha?" When he saw that they understood he was asking a rhetorical question as a teacher for their benefit, he said, "Bring him in, bring him in." These were his last words.
"Papaji Biography" by Arjuna Nick Ardagh on the LivingEssence website.
"About Sri Poonjaji" by Eli Jaxon-Bear in Wake Up and Roar Volume 2.