Jiah Khan was born into a Muslim family in New York City, United States. She was the daughter of Ali Rizvi Khan, an Indian American businessman, and Rabiya Amin, a Hindi film Actress in the 1980s from Agra, Uttar Pradesh. Khan's father left the family when she was two and never came back. Describing her father's absence she said "A man who left his daughter when she was two, should be hanged in public". Her paternal aunts were Pakistani actresses Sangeeta (born Parveen Rizvi) and Kaveeta (born Nasreen Rizvi). Khan grew up in London where she completed her Edexcel O level and A level with five As, before moving to Mumbai to pursue a career in Bollywood. She has two younger sisters Kavita and Karishma. She was inspired to enter Bollywood after watching Ram Gopal Verma's former protege Urmila Matondkar's movie Rangeela at the age of six.

In 2004, at the age of 16, Khan was signed to act in Mukesh Bhatt's Tumsa Nahin Dekha but backed out when both she and the Director felt the role was too mature for her; she was immediately replaced by Dia Mirza. Two years later, in 2007, at the age of 18, Khan made her debut in Ram Gopal Verma's controversial romantic thriller Nishabd, as Jia, where she acted opposite Amitabh Bachchan. Despite the provocative content in the film, it performed poorly at the box office, and earned mixed reviews from critics. Nonetheless, Khan received a mostly positive reception for her performance, with critics noting her confidence, attitude, and sex appeal. Raja Sen praised her portrayal of Jia, a seductive, free-spirited teenager, calling her performance "nuanced" and "impressive". Taran Adarsh agrees, saying that "Newcomer Jiah Khan is supremely confident. Loaded with attitude and sex appeal, the newcomer carries off her part with flourish. Her scenes with Bachchan are superb!" Rajeev Masand adds that she is "perfectly cast" for the film. She was also nominated for a Filmfare Best Female Debut Award, however lost to Deepika Padukone.

Born in New York City and raised in London, she was the niece of Pakistani actresses Sangeeta and Kaveeta. Khan always aspired to pursue a career in acting and moved to Mumbai for a film career. She made her film debut in the 2007 Ram Gopal Verma film Nishabd for which she was nominated for Filmfare Award for Best Female Debut. She was later noted for portraying a modern, independent woman in Ghajini which was the highest-grossing Bollywood film of 2008. Her performance in the latter earned her significant acclaim. Her final film appearance was in Sajid Khan's romantic comedy Housefull, which was the fifth highest-grossing Bollywood film of 2010. Khan had catapulted herself into the Bollywood 100 Crore Club with Ghajini and Housefull.

The following year, she appeared alongside Aamir Khan and Asin in A.R. Murugadoss's psychological thriller Ghajini, the Hindi remake of its namesake. She played Sunita, a medical student who investigates the history of Sanjay Singhania, portrayed by Aamir Khan. The film gathered much appreciation from critics, and went on to become the highest grossing Bollywood film of 2008. Khan's performance attracted mixed reviews, with critics agreeing that her role was "sketchy". Despite this, Sukanya Verma compliments her performance, commenting that Khan "continues to strike as an exquisite and expressive Actress."

In 2010, Khan had almost completed the shooting of the dance film Chance Pe Dance opposite Shahid Kapoor when the Director Ken Ghosh asked her to leave the film and was replaced by Genelia D'Souza. The Director said that she got over-friendly with Kapoor and was not doing her job well. However, after the release of the film, Khan said that she was asked to leave because the Director had a bad eye on her. While Kapoor said that he got to know about the replacement when D'Souza came on the set for shooting. Kapoor further said that he has no hand in the replacement of Khan. However, the film was a box office flop and Khan said that she was happy for leaving the film. That same year, Khan made her last film appearance in a supporting role as Devika K. Samtani, the ex-wife of Akshay Kumar's character, in Sajid Khan's Housefull with an ensemble cast including Arjun Rampal, Riteish Deshmukh, Deepika Padukone and Lara Dutta. Upon release, Housefull received negative reviews, though her performance was better received. Commercially the film did very well and became the highest grossing Bollywood film of the year. Jiah had signed a few movies including Udhas Singh's Aap Ka Saaya, in which she was supposed to play Ranbir Kapoor's wife. Unfortunately, this film couldn't be completed.

Aditya Pancholi's son Sooraj Pancholi, who was allegedly in a live-in relationship with Khan, was taken into police custody during the investigation of her suicide on 10 June 2013. The Bombay High Court granted him bail on 2 July 2013. Her death case is being probed by Central Bureau of Investigation (CBI). On 3 July 2014, Bombay High Court ordered CBI probe into Jiah Khan suicide case. Khan’s suicide case transferred to CBI by High Court. The prosecution in the case charged a case of sexual assault and murder on Sooraj Pancholi. The Bombay High Court is set to hear the matter again on 7 June 2016, following the Supreme Court's call to expedite the process. On 1 August 2016 the CBI ruled out murder in the case. As per its investigations the cause of Jiah's death was 'suicide by hanging'. Jiah's mother Rabia independently hired a British forensics expert Jason Payne-James. He concluded in a report (20 September 2016) that Jiah Khan's hanging was staged and the marks on her face and neck indicate it was not simply suicide.

An episode of the TV series Yeh Hai Aashiqui was loosely based on Jiah Khan's suicide, with Mihika Verma and Rithvik Dhanjani playing the central characters. The Crime Patrol Dial 100 episode on February 21st 2018 was based on her suicide.