Jayasudha was born as Sujatha in Madras, Tamil Nadu on 17 December 1958 to a Telugu-speaking family. Her aunt is Telugu cinema Actress and Director Vijaya Nirmala . Jayasudha made her film debut when she was twelve years old as Jamuna's daughter in the Telugu film Pandanti Kapuram (1972). Director K. Balachander gave her a small role in the Tamil film Arangetram where she shared space with Kamal Haasan. She acted in a number of films in Telugu and Tamil mostly under Balachander's direction—Sollathaan Ninaikkiren (1973), Naan Avanillai (1974) and Apoorva Raagangal and in Idi Katha Kaadu with Chiranjeevi . She also changed her name to Jayasudha, since there was already another Actress named Sujatha (actress). Her fame quickly spread, where Telugu film producers were offering her good film roles.

Her roles varied from the cute looking teeny bopper who wore minis in Nomu (1974), to that of a tortured wife of a sadist husband in K. Balachander's film Idi Katha Kaadu (1979) to that of a Comedian who discovers that her husband wants to murder her for her wealth in Money (1993). She performed showy roles in Telugu remakes of Hindi films, such as Yugandhar (1979) (the fighter role that Zeenat Aman originated in Don), Illalu (Reena Roy's dark-shaded role from Apnapan (1977)).

While her debut role as heroine in the Telugu film Lakshmana Rekha (1975) got her attention, it was really the title role in Jyothi (remake of the Hindi film Mili starring Jaya Bhaduri) that made her a big star in Telugu films. She was now called a successor to the great Telugu Actress Savitri and performed many strong roles and showed excellent range. She is given the title "Sahaja Nati" which means "natural/realistic Actress."

She has acted in 325 films, and in one year, she had 24 film releases. She accomplished all this, despite her illiteracy in Telugu, by having people read lines to her and she would remember and deliver her lines. Noted filmmaker Dasari Narayana Rao repeatedly cast her in his films. In the film "Idekkadi Nyayam" (1977), he used her name in the song "Andalanni Neelone Dagunnayi. . .Jayasudha," that was picturised on her. By 1982, she became such a famous Actress that Dasari titled a film that she starred in, Jayasudha (1982), named after her. Her fame also allowed producers to cast her sister Subhashini in supporting roles in some of the films that she starred in, such as Sivaranjani (1978), "Doctor Cine-actor" and Meghasandesam (1983). Subhashini's daughter Pooja is now a budding Actress.

Jayasudha is a granddaughter of eminent scholar and literary Historian, Nidudavolu Venkatarao and Gidugu Krishna Murthy. She first married rajendra prasad brother in law of vadde Ramesh in Vijayawada. Dasari Narayana Rao was instrumental for this marriage. Some how it has not worked and later she married Producer Nitin Kapoor, cousin to actor Jeetendra in 1985 and have two children, sons Nihar (born in 1986) and Shreayan (born in 1990). While she has friends in the industry, such as Raadhika and Revati, her closest friend is Jayaprada, with whom she had acted in a number of films such as Adavi Ramudu and Meghasandesam. She was elected as MLA for Congress from the Secunderabad constituency in 2009 Andhra Pradesh Assembly elections but lost election and was placed 3rd in the 2014 Telangana assembly elections. Her husband Nitin Kapoor committed suicide by jumping from the top of a building on March 14 2017. It was stated that he was under depression for many years, but the exact reason for his suicide is not known. It was a unhappy coincidence that he committed suicide just 3 days before his marriage anniversary, which is on March 17. In a press statement released on her marriage anniversary, Jayasudha said that her husband was in constant search of mental peace and she hoped that finally he got what he always wanted.