Pareja was born in Guayaquil in 1908, the son of Fernando Pareja y Pareja and of Amalia Diez-Canseco y Coloma. Pareja had to provide for his family at the age of 14, reading at night and assisting as a listener at the Colegio Vicente Rocafuerte. His early education was accomplished in his hometown: primary school at the Colegio San Luis Gonzaga of the Christian Brothers.

During 1929-30, Pareja embarked on a footloose adventure in the United States. As a result of the Great Depression he worked on the New York City docks for a year (his later novel El Muelle reflects these experiences). Back in Ecuador, he became a professor of history and of Spanish and Spanish American literature at Vicente Rocafuerte. He also served as a Superintendent of Secondary Education and as a Deputy of Guayas Province. In 1934 he married his cousin, Mercedes Cucalón Concha niece of Carlos Concha Torres with whom he had three children, Cecilia, Jorge and Francisco.

During the dictatorship of Federico Páez (1935-37), however, Pareja was incarcerated and ultimately exiled to Chile where he was employed by the Ercilla Publishing House. Returning to Ecuador, he became a member of the Assembly, but was jailed again by the regime of President Aurelio Mosquera Narvaez. (This 30 day detainment formed the basis of his novel, Hombres sin tiempo). He was Ecuador's chargé d'affaires in Mexico in 1944. In 1945 he became a special representative for the United Nations Relief and Rehabilitation Administration (UNRRA) in Washington D.C. and later Montevideo and Buenos Aires for the Governments of México, Central America, Argentina, Uruguay and Paraguay.

Between August 1979 and July 1980, during the government of President Jaime Roldós Aguilera, Pareja was appointed to the post of Minister of Foreign Affairs. During the rule of Roldós's successor, President Osvaldo Hurtado, he served as Permanent Delegate to UNESCO and Ambassador to Paris (1983-84).

After retirement, Pareja dedicated his time to historical research. He died in Quito on 1 May 1993.

Pareja, of a conservative family, was part of a “socialist generation” in Ecuador. He lived through considerable political turmoil in the 1920s and concluded that his country’s salvation lay on the left side of the political spectrum. He denied, however, being a “left-winger” and insisted that he did not desire to use the fiction writer’s art as an instrument of propaganda. Rather, he sought to simply and directly depict social conditions that called for redress, while denouncing those in power who were guilty of corruption and injustice. His first novel, La casa de los locos (1929), satirized Ecuadorian politics and attacked so many real people that publication was considerably delayed. Pareja attested to the strong influence of the Mexican writer and politician José Vasconcelos. The main influence in his life and work were the Greek Classics, Honoré de Balzac, Dostoievski, Thomas Mann, Will Durant and Arnold Toynbee... Some critics have also detected the influence of Freud, Ehrenburg, Gide and Proust in him.

Pareja's cycle of narrative fiction was marked by realism and a strong connection with the history of his country (El muelle [“The Pier”], 1933; Hombres sin tiempo [“Men Without Time”], 1941; Las tres ratas [The Three Rats], 1944). Having established a reputation as a writer both inside and outside of Ecuador, in 1944 he published an important novel biography, The Barbaric Bonfire, about the actions and historical circumstances surrounding the life and death of General Eloy Alfaro. A new cycle of novels started in 1956 with La advertencia (“The Warning) and continued with El aire y los recuerdos (“Air and Memories”; 1959) and Los poderes omnímodos (“All-embracing Powers”; 1964). It was ambitious to describe the evolution of Ecuadorian society since 1925. Subsequently, he published the novel Las pequeñas estaturas (Small Statures; 1970) and authored an essay on “Thomas Mann and the New Humanism” (1956) and “Essays on Essays” (1981).

Pareja maintained a long association with the famous "Guayaquil Group" of Ecuadorian writers (José de la Cuadra, Joaquin Gallegos Lara, Demetrio Aguilera Malta, Enrique Gil Gilbert). He also associated with Jorge Luis Borges, Juan David García Bacca, John Dos Passos, Arnold Toynbee, Julio Cortázar, Alvaro Mutis, Jorge Enrique Adoum, Benjamin Carrión, Oswaldo Guayasamín and his nephew Miguel Donoso Pareja. The only biography about Pareja was written by the journalist and writer Francisco Febres Cordero.

Pareja maintained periodical correspondence with John Steinbeck.

The President Galo Plaza Lasso, worked with Pareja in educational projects after World War II around the globe, mostly in Central and South America.