The traditional spot for the beheading is known as the Abbey of the Three Fountains (the head reputedly bounced three times before coming to rest), which is south of the modern center of Rome. Early reports stated he was laid in the family tomb of a devout Roman noblewoman named Matrona Lucilla. His remains may have subsequently been hidden in catacombs for safekeeping during Vespasian’s reign (see below). Nearby the abbey is the monumental Church of San Paolo Fuori Le Mura (St. Paul Outside the Walls) where the remains of Paul are entombed. Owing to popular interest in the location of Paul’s burial, experts from the Vatican undertook in 2002 to investigate the area beneath the main altar where it was believed his tomb is located.
The team first conducted a survey in order to reconstruct the shape of the original basilica built by the Emperor Constantine around A.D. 320. In A.D. 390, the Emperor Theodosius enlarged the structure and encased Paul's remains in a sarcophagus located on view in the middle of the basilica. Later emperors further enlarged and embellished the church such that it became the largest and most beautiful in all of Rome. Unfortunately, the building was largely destroyed by a fire in 1823.
Having established the layout of the original small basilica, a second excavation was begun under the altar that brought to light the sarcophagus, which was situated at the ground level of the 4th century building. Vatican Museum archaeologist George Filippi states, “We know for sure it’s the same object because the stone coffin is embedded in the layer of the Theodosian basilica.” An earthquake in A.D. 433 caused the collapse of portions of the building. Subsequent renovations raised the level of the floor and the sarcophagus was buried and covered by a marble tombstone.
The main altar of the modern church, named the Papal Altar, was erected atop the concrete and debris left by the 1823 fire that had buried the original sarcophagus and tombstone. The excavations revealed an inscription on the marble tombstone bearing the Latin words “Paulo Apostolo Mart,” which translates to “Apostle Paul, Martyr.” Archaeologists further opened up a window measuring 70 cm. wide and 1.00 meter deep to reach the side of the sarcophagus. An ancient hole in the cover about 10 cm. wide was discovered which, according to Filippi, was used to dip pieces of fabric inside the coffin in order to produce relics out of the pieces themselves.
Earlier this year Pope Benedict announced the finds from an inspection of the contents of the sarcophagus. A tiny hole drilled in the coffin revealed:
traces of a precious linen cloth, purple in color, laminated with pure gold, and a blue colored textile with filaments of linen. It also revealed the presence of grains of red incense and traces of protein and limestone. There were also tiny fragments of bone, which, when subjected to Carbon 14 tests by experts, turned out to belong to someone who lived in the 1st or 2nd century.
While these results fall short of proving conclusively that the Apostle Paul’s remains are entombed in the church, they are consistent with the traditions and leave open the opportunity for further investigations. The modern basilica is a massive construction consisting of a large central nave flanked by two side aisles divided by 80 enormous columns. It reputedly replicates the grandiose Basilica Ulpia of the Emperor Trajan, built early in the 2nd century A.D. The Roman basilica was an architectural form initially used for monumental public buildings and later adopted by Christians for sacred structures. http://www.biblearchaeology.org/post/2009/10/08/new-discoveries-relating-to-the-apostle-paul.aspx#Article
No conclusive proof it is Paul. Not that is would matter if it were.
Peter was not beheaded, he was crucified upside down. Bible reader?