Paper Mario is the paper form of Mario that is the main protagonist and playable character of the Paper Mario series, a spinoff of the Super Mario series. Paper Mario is usually on a quest which typically involves rescuing Princess Peach.
Paper Mario appears in five canon games, being Paper Mario for the Nintendo 64, Paper Mario: The Thousand-Year Door for the Nintendo GameCube, Super Paper Mario for the Nintendo Wii, and Paper Mario: Sticker Star and Mario & Luigi: Paper Jam for the Nintendo 3DS as well as the upcoming game Paper Mario: Color Splash.
There is an Paper Mushroom powerup in New Super Mario Bros: The Underground that turns the characters into Paper, and they look like characters from the Paper Mario series. Paper Mario himself is also playable.