He was born Tauno Brännäs, but changed his name to Tauno Palo in 1935. He recruited in the military and was educated as a chemist. His friend invited him to join the theatre of Working Men's Club in Sörnäinen. Theatre director and famous actor Aarne Orjatsalo became his mentor. The dark-haired lad from Sörnäinen who had a good voice got attention, and in 1931 he was invited to auction for film studios. His final breakthrough came when era of silent films was over, and people could hear his voice.

Palo left his work as chemist in 1932. He was hired by the Finnish National Theatre, but until 1938 he got only small roles, because his popularity as a film star harmed his credibility on the stage.

Ansa Ikonen played as his leading lady in 12 films and in numerous plays and on tours. In eyes of the public, they became the most romantic couple ever. In real life they did not have a romantic relationship.

In Kulkurin Valssi, Palo uttered perhaps the most famous words in the history of Finnish film, "I will be remembered not as the mere shadow of the man I once was, but as the mere shadow of the man I am now."

Palo had in total over 300 roles on stage and played in 65 feature films.

Before the Second World War Palo recorded a number of songs from the musical films he acted in. He continued his recording career after 1967.