Sauté celery in 1 cup butter until tender but not brown; stir in next 4 ingredients.
Place 1 cup cracker crumbs in bottom of a greased 2-quart casserole. Top with half of oysters and half of celery mixture. Repeat layers, beginning and ending with cracker crumbs. Melt remaining butter, and pour over cracker crumbs. Sprinkle with paprika. Bake at 350° for 45 minutes or until bubbly.