Paul withstood a fierce challenge from Kobe Bryant, recording 30 points and 13 assists to Bryant's 38 points, and the Clippers moved further ahead in both the standings and the crosstown rivalry.
"It's a big win because it's a division game," Paul told reporters, after he carried the scoring load in the absence of injured reserve Jamal Crawford (sore foot).
"That was ugly down the stretch and it was all my fault. We had some terrible possessions (late) and made it interesting for the fans."
The Lakers did their best to tear up the script late on by climbing out of a 19-point deficit in the fourth quarter and closing to 99-97 with two minutes remaining.
However, Paul shut the door on the Lakers, scoring the final eight points for his team, including a tough step-back jumper over the outstretched Bryant in the waning moments.
Blake Griffin added 24 points in the winning effort while Dwight Howard put up 21 points and 15 rebounds for the Lakers (15-17), who have lost three of their last four.
Despite sharing the Staples Center, the teams have had little else in common this season as the Clippers (26-8) have raced toward the top of the West while the Lakers are struggling to find an identity under new coach Mike D'Antoni.
The team is just 10-12 since D'Antoni took over.
"It's going to take time and we don't have a lot of it," said Lakers point guard Steve Nash, who finished with 12 points and 10 assists. "You just stick with it."
The Clippers ran off a franchise-record 17 straight wins before losing their previous two games but they quickly regained their form and grabbed a 10-point halftime lead on the Lakers.
The athletic Clippers used their defense to ignite their fast break and push the game's energy with crowd-pleasing dunks.
After their lead swelled to 19 early in the fourth, the Lakers chipped away behind Bryant, who delivered 16 points in the final quarter, to raise the stakes in his duel with Paul.
The two All Stars traded shots all night, with Bryant throwing down a ferocious dunk over Paul in the first quarter, but the Clippers point guard got the final say with a critical jumper and six free throws over the last minute.
"Chris made some amazing shots. It was a great matchup of two of the best in the game," D'Antoni said. "We had a shot at the end and we just didn't do it."
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