Penty was born on 2 November 1985 in Mumbai to a Parsi father and a Christian mother. She is a Christian by faith. She attended St. Agnes High School in Mumbai, and graduated with a bachelor's degree in Mass Media from St. Xavier's College.

Penty began her modeling when she sent her photographs to Elite Models India, who liked her work and suggested she take up modelling assignments. At this stage, she was in college, and was reluctant to choose on a career in modelling, so Penty decided to work part-time as a fashion model. In 2005, Penty officially started working for Elite Models India, and made her runway debut at the Indo-Italian Festival for Italian designers Nicola Trussardi and Gianfranco Ferré. Thereafter, Penty modelled for several other Indian designers, including Wendell Rodricks, Rohit Bal and Rina Dhaka. By 2007, she had established a successful modelling career after appearing in print campaigns for some of India's most prominent brands, including Tribhovandas Bhimji Zaveri, Parachute and Westside; as well as featuring on the covers of a few Indian fashion magazines.

The following year, Penty went on to model at the international circuit when she began to endorse global brands including Maybelline, Garnier and Forever 21. On Penty's international appeal, the CEO of Elite Models India Sushma Puri commented, "Diana has a face that is very versatile and appeals to both Indian and international markets and she is also young, beautiful and confident. This makes her the ideal choice for any international brand." Later in her modelling career Penty started to receive film offers, though she believed herself to be too inexperienced, and rejected them to focus on modelling. From 2008 to 2010, Penty established herself internationally after modelling for fashion weeks in Paris and New York.

Penty was originally slated to make her Bollywood debut in 2011 with Imtiaz Ali's Rockstar opposite Ranbir Kapoor, although she rejected the film due to her modelling commitments at the time and was subsequently replaced by Nargis Fakhri. She later signed up for Homi Adajania's Cocktail instead; at Ali's suggestion. Cast alongside Saif Ali Khan and Deepika Padukone, the film received mixed to positive reviews. Penty's portrayal of Meera, a simple Indian girl with traditional values was well received by critics. Taran Adarsh of Bollywood Hungama commented that "Diana, who makes her acting debut, gets to portray a rather difficult character for her debut film. There's a very disarming kind of innocence that she brings to the role and she impresses a great deal." Raja Sen agreed, mentioning that she is "refreshingly natural". Anupama Chopra added that "Diana is saddled with the most colourless character but [...] infuses her role with a quiet poise and holds her own." Her performance earned her nominations for best debut and best supporting Actress at numerous Indian award ceremonies. Cocktail emerged as a box office hit.

Penty has also featured on several magazine covers, such as the July 2012 issue of Vogue, the October 2012 issue of Elle, the January 2013 issue of Verve, the January/February 2013 issue of Women's Health India, the February 2013 issue of Grazia, the May 2013 issue of Femina, among others.

After a four year absence from the screen, Penty played the titular runaway bride in Anand L. Rai's production Happy Bhag Jayegi (2016). About the break from acting, Penty said: "It wasn’t a conscious break. I was taking my time looking to be a part of an interesting story. I didn’t want to do anything that came my way." The film earned mixed reviews from critics but was a sleeper hit. Rohit Bhatnagar wrote that Penty "steals the spotlight in every frame", while Anna M.M. Vetticad of Firstpost said: "Penty is brimming with potential [...] but her Happy, despite being the titular protagonist, is the most under-written character."

As of September 2017, Penty has one upcoming project. Diana Penty has also been confirmed to return for the sequel of Happy Bhag Jayegi. and in Abhishek Sharma's Parmanu: The Story Of Pokhran, she is cast opposite John Abraham.