Born on 21 September 1980 in Bombay (now Mumbai), Kapoor (often informally referred to as 'Bebo') is the younger daughter of Randhir Kapoor and Babita (née Shivdasani); her elder sister Karisma is also an Actress. She is the paternal granddaughter of actor and filmmaker Raj Kapoor, maternal granddaughter of actor Hari Shivdasani, and niece of actor Rishi Kapoor. According to Kapoor, the name "Kareena" was derived from the book Anna Karenina, which her mother read while she was pregnant with her. She is of Punjabi descent on her father's side, and on her mother's side she is of Sindhi and British descent. As a child, Kapoor regularly practised Hinduism with her family, but was also exposed to Christianity from her mother.

Describing herself as a "very naughty [and] spoilt child", Kapoor's exposure to films from a young age kindled her interest in acting; she was particularly inspired by the work of actresses Nargis and Meena Kumari. Despite her family background, her father disapproved of women entering films because he believed it conflicted with the traditional maternal duties and responsibility of women in the family. This led to a conflict between her parents, and they separated. She was then raised by her mother, who worked several jobs to support her daughters until Karisma debuted as an Actress in 1991. After living separately for several years, her parents reconciled in October 2007. Kapoor remarked "My father is also an important factor in my life [...] [Al]though we did not see him often in our initial years, we are a family now."

Kapoor has received six Filmfare Awards out of ten nominations. For her role in Refugee, Kapoor was awarded the Best Female Debut in 2000. She earned a special jury recognition for Chameli (2003), and two Critics Award for Best Actress for Dev (2004) and Omkara (2006). Kapoor later received the Best Actress and Best Supporting Actress for Jab We Met (2007) and We Are Family (2010) respectively.

A key point in Kapoor's career came when she was cast by Karan Johar as Pooja ("Poo", a good-natured, superficial girl) in the 2001 melodrama Kabhi Khushi Kabhie Gham... alongside an ensemble cast. Filming the big-budget production was a new experience for Kapoor, and she recalls it fondly: "[I]t was great fun doing [the film and] we had a blast. [W]orking with the unit and the six mega star set was a dream come true." Kabhi Khushi Kabhie Gham... was an immensely popular release, finishing as India's second highest-grossing film of the year and Kapoor's highest-grossing film to that point. It also became one of the biggest Bollywood success of all time in the overseas market, earning over ₹1 billion (US$15 million) worldwide. Taran Adarsh described Kapoor as "one of the main highlights of the film", and she received her second Filmfare nomination for the role—her first for Best Supporting Actress—as well as nominations at the International Indian Academy (IIFA) and Screen Awards.

Kapoor has participated in several stage shows and world tours since 2002. Her first tour (Heartthrobs: Live in Concert (2002) with Hrithik Roshan, Karisma Kapoor, Arjun Rampal and Aftab Shivdasani) was successful in the United States and Canada. At the end of that year, she performed with several other Bollywood stars at Kings Park Stadium in Durban, South Africa in the show Now or Never.

Additionally, Kapoor has made public appearances to support other charitable organisations. She performed at a fundraiser for the World Youth Peace Summit in November 2003, and participated in a concert to raise money for victims of the 2004 Indian Ocean earthquake and tsunami. She visited Indian jawans (troops) in Rajasthan, for a special Holi weekend episode of NDTV's reality show Jai Jawaan. In 2010, Kapoor adopted the village of Chanderi in Madhya Pradesh as part of NDTV's Greenathon Campaign, to provide the village with a regular supply of electricity. Four years later, she participated in a campaign to raise awareness on hunger and malnutrition in the world and made donations to the Kashmir flood relief. In September 2016, Kapoor attended the inaugural of Global Citizen India—a joint initiative by the music festival of the same name and The Global Education and Leadership Foundation.

Manjula Sen of The Telegraph wrote that although she has "the worst success ratio among her contemporaries", it does not affect her marketability. Sen further explained that Kapoor's strength lies in her being versatile; she is "effortlessly honest in her performances. It is a candour that spills over in her personal conduct." Writing for CNN-News18, Rituparna Chatterjee spoke of her transformation to date: "[A]fter 40 films and 10 years of fighting off competition from some of the most versatile actors of her generation, Kareena has matured into a bankable actor reinventing herself with surprising ease." In 2004, Kapoor placed third on Rediff's list of "Top Bollywood Female Stars". She was later ranked seventh and fifth in 2005 and 2006, respectively, and returned to third place in 2007. In January 2011, Kapoor placed fourth on Rediff's list of "Top 10 Actresses of 2000–2010".

Shortly afterwards, Kapoor was cast for the first time as a villain in the thriller Fida. Set against the backdrop of the Mumbai underworld, the film follows the story of an online heist in which her character, Neha Mehra, becomes involved. Although the film was unsuccessful at the box office, Kapoor received positive reviews for her performance, and some critics noted a distinct progression from her earlier roles. Her subsequent releases that year included Abbas-Mustan's thriller Aitraaz and Priyadarshan's comedy Hulchul, both of which were successful at the Indian box office. Following the success of her last two releases, she was cast as the protagonist of the 2005 drama Bewafaa. The feature received mostly negative reviews, and Kapoor's portrayal of Anjali Sahai (an unfaithful woman) was not well received. Nikhat Kazmi of Indiatimes believed that to become a serious Actress Kapoor was embodying a maturer, more-jaded character beyond her years in Bewafaa. That same year, she starred in the romantic dramas Kyon Ki and Dosti: Friends Forever, both of which underperformed at the box office; however, Kapoor's performance in Kyon Ki was generally well received by critics (with the BBC describing her as "a pure natural").

Four years later, Kapoor returned to the stage with six other Bollywood celebrities in the successful Rockstars Concert world tour. The concert was originally scheduled to commence in April 2006, but was postponed due to the arrest of Salman Khan. It later began the following month and was staged in 19 cities across the United Kingdom, the United States and Canada. In 2008, Kapoor performed in Shah Rukh Khan's Temptation Reloaded 2008, a series of concerts in a number of countries. The show (which also featured Arjun Rampal, Katrina Kaif, Ganesh Hegde, Javed Ali and Anusha Dandekar) debuted at the Ahoy Rotterdam venue in Rotterdam, the Netherlands. Several months later she again joined Khan, Rampal and Kaif to perform for an audience of 15,000 at Dubai's Festival City Arena.

Kapoor returned to film as the female protagonist Geet Dhillon, a vivacious Sikh girl with a zest for life, in the romantic comedy Jab We Met (2007). Director Imtiaz Ali was not a well-known figure before its production, with only one feature credit to his name, but Kapoor agreed to the film after being impressed with his "mind-blowing" script. Featured opposite Shahid Kapoor, the film relates the story of two people with contrasting personalities who meet on a train and eventually fall in love. The film was received favourably by critics and became successful at the box office with gross earnings of ₹303 million (US$4.6 million). Kapoor won several awards for her performance, including her second Screen Award and the Filmfare Award for Best Actress. Jaspreet Pandohar of the BBC commented that the role required a mixture of naivety and spontaneity, and was impressed with Kapoor's effort. The critic Rajeev Masand labelled her the film's "biggest strength, as she brings alive her character with not just those smart lines, but with the kind of candor actors seldom invest in their work." While shooting for Jab We Met, Kapoor and Shahid ended their four-year relationship. When asked by Mumbai Mirror, she stated "I hold him in utmost regard, and I hope one day we could be good friends. He is a great guy."

Today, Kapoor is considered as one of the most popular Bollywood celebrities in India. Her look and performances have established her as a style icon for young women. In a 2009 poll conducted by the newspaper Daily News and Analysis Kapoor was voted one of India's most popular icons; with her partner Saif Ali Khan, she was listed amongst the top Celebrity endorsers for brands and products worldwide. She became the only Indian Actress to be featured on CNNGo's list of "Who Mattered Most in India", and was later selected by Verve for its list of the country's most powerful women from 2008 to 2013. In June 2010, Kapoor was named "India's Most Beautiful Woman" by the Indian edition of People magazine; Eastern Eye and Indian Maxim named her as "Asia's Sexiest Woman" and "India's Hottest Woman" in 2011 and 2012 respectively. The following year, she was selected by India Today for its list of the country's most influential women. From 2012–16, Kapoor has featured on Forbes India's "Celebrity 100," a list based on the income and popularity of India's celebrities, peaking at the seventh position in 2012 with an estimated annual earning of ₹735 million (US$11 million).

While discussing her career highlights in a 2010 article, Rediff.com noted: "[E]ven though a lot of her starring roles have been forgettable, [a] look at her filmography now, however, would show a more thoughtful selection of roles [...] playing to her strengths." Her portrayal of a series of superficial characters at the start of her career were criticized; film Historian Gyan Prakash explained that these roles "tended to infantilise her, packaging her as daddy's little girl, all bubble and no fizz". Critics noted Chameli (2004) as her coming of age, claiming that "a new actor in her was discovered". Following her portrayal of a variety of character types in Chameli, Dev (2004), Omkara (2006) and Jab We Met (2007), Kapoor was noted for her versatility. In 2010, Filmfare Magazine included two of her performances—from Omkara and Jab We Met—in its list of "80 Iconic Performances". India Today labelled her "the most versatile female lead in the industry", noting that she "play[s] her roles with trademark spunk".

Kapoor had further success in 2011 as the love interest of Salman Khan's character in the romantic drama Bodyguard, a remake of the 2010 Malayalam film of the same name. The film was not well received by critics, though became a financial success, with a domestic total of ₹1.4 billion (US$21 million)—India's highest-earning film of the year. A review in Mint dismissed Kapoor's role as the "sacrificial, ornamental [and] submissive female"; Mid Day referred to her as "bright", arguing that she "actually manages to bring her caricature of a role alive". She next appeared in Anubhav Sinha's science fiction film Ra.One with Shah Rukh Khan and Arjun Rampal. Made on a budget of ₹1.5 billion (US$23 million)—"India's most expensive film" at the time—the film follows the story of a London-based videogame designer creating a villainous character who escapes into the real world. Despite negative media coverage of the film's box office performance, Ra.One became one of the biggest earners of the year with a worldwide total of over ₹2.4 billion (US$37 million), and Kapoor's fourth major commercial success in two consecutive years.

On 16 October 2012, Kapoor married actor Saif Ali Khan in a private ceremony in Bandra, Mumbai, and a reception was later held at The Taj Mahal Palace Hotel and the Lutyens Bungalow Zone in Mumbai and Delhi respectively. Kapoor stated that despite adding Khan to her name she would continue practising Hinduism after her marriage. At the end of the year, she co-starred alongside Aamir Khan and Rani Mukerji as the "tantalisingly seductive prostitute" Rosie, in Reema Kagti's crime mystery Talaash: The Answer Lies Within. Set against the backdrop of Mumbai's red-light districts, it follows the travails of its personnel and principal, Inspector Surjan Singh Shekhawat (Khan) who is assigned the duty of solving a mysterious car accident. Pratim D. Gupta of The Telegraph found Kapoor to be a standout among the ensemble, adding that "she brings an unseen mix of oomph and emotion that becomes the [film's] centrepiece". With global revenues of ₹1.74 billion (US$27 million), the film emerged as a box office hit, and earned Kapoor Best Actress nominations at the Screen, Stardust and Zee Cine award ceremonies.

In 2013, Kapoor collaborated with Ajay Devgn for the fourth time (alongside Amitabh Bachchan, Arjun Rampal, Manoj Bajpayee and Amrita Rao) in Prakash Jha's Satyagraha, an ensemble socio-political drama loosely inspired by social Activist Anna Hazare's fight against corruption in 2011. The film received little praise from critics and underperformed at the box office earning ₹675 million (US$10 million) domestically. A review in the Daily News and Analysis noted that Kapoor's role as reporter Yasmin Ahmed was "limited to mouthing a few 'important' dialogues and being present in crucial scenes like any leading lady". Following an appearance in the poorly received romantic comedy Gori Tere Pyaar Mein (2013), Kapoor decreased her workload for the next two years to focus on her marriage and family. She took on smaller parts where she played the love-interest of Ajay Devgn and Salman Khan in the dramas Singham Returns (2014) and Bajrangi Bhaijaan (2015) respectively. Singham Returns served as a sequel to the 2011 film Singham and Kapoor's role was written specifically for her by Rohit Shetty—the third time the pair collaborated. Reviews for the film were generally mixed with Kapoor being criticized for taking a role of minimal importance, but the film was a financial success with a revenue of over ₹1.4 billion (US$21 million). Kabir Khan's Bajrangi Bhaijaan emerged as India's highest-earning film of the year grossing a total of ₹3.20 billion (US$49 million), and earned the National Film Award for Best Popular Film Providing Wholesome Entertainment at the 63rd National Film Awards.

While a segment of the press has described Kapoor as friendly and extremely close to her family, others have criticized her for being arrogant and vain—an image she gained in the wake of her superficial character, Poo, in Kabhi Khushi Kabhie Gham... (2001). She subsequently featured in films portraying similar characters, and this further established her off- and on-screen personae. Before the release of Chameli (2004) (in which she played a sex worker), Kapoor stated that "there is a certain image that people identify you with [and] [i]t always follows you whichever role you play. I am trying to transgress this image and become more screen-friendly than image-friendly." Chameli helped Kapoor reinvent her on-screen persona, and she later explained that her honesty and openness was often perceived by the media as arrogance.

Known for her nonchalant relationship with the media, Kapoor has gained a reputation for discussing her private life with no reservations. As a child she regularly attended award ceremonies and events with her family, and would also accompany Karisma on-set during filming. In an interview with Filmfare, she explained that growing up in a film family helped her develop a sense of professionalism and dedication towards her craft. Kapoor's private life has been the subject of media attention in India, with frequent press coverage of her weight and relationship with actor Saif Ali Khan. The couple—dubbed "Saifeena" by the entertainment media—has been one of the country's most-reported Celebrity stories since 2007, and Kapoor gave birth to their son Taimur on 20 December 2016.