Tumblr's rich text editor works like any other text editor when it comes to inserting paragraph breaks, you just need to hit enter. There are two different ways for you to edit your text one is using the default rich text editor, and the other is entering the details of your post in the HTML editor which can give you more control of your post formatting but requires a bit more know-how. You can also enter line breaks instead of paragraph breaks in both editors.
Enter the text for your first paragraph.
Hit "Enter" to start a new paragraph. This will create a standard paragraph break, which inserts space between two paragraphs as is standard on the Internet.
Hold down the "Shift" button while pressing "Enter" to create a line break. This starts your text on a new line without inserting a space between the lines.
Click the "HTML" button at the right end of the rich text editor toolbar. This will open the HTML editor in a pop-up window.
Enter the HTML code "
" to start a new paragraph. Fill in the text of your paragraph however you want, and end the paragraph with closing tag "". Do this for each paragraph of your post.
Create line breaks by entering " " at the end of the line. You can do this with as many lines as you want, though keep in mind that large blocks of text are hard to read on the computer screen.
Click "Update" in the lower left corner to see your text in the rich text editor and confirm that your formatting is correct.
All Tumblr post types use the same rich text and HTML editor, except the Chat post which uses it's own formatting that cannot be overridden.