A paper folding apparatus for a binding machine, capable of discharging paper sheets by folding the paper sheets twice, includes a first knife unit and a second knife unit. The first knife unit has a first feeding path and a pair of first paper folding rollers. The second knife unit has a second feeding path and a pair of second paper folding rollers. A paper arranging guide is installed in front of the pair of first paper folding rollers, and the second knife unit includes a pinion, a rack selectively engaged with the pinion, a rack guide configured to provide a path on which the rack is moved, a resilient member resiliently supporting the rack, and a second paper folding knife configured to move back and forth between the second paper folding rollers in association with a moving direction of the rack.