Sen Sharma was born on 3 December 1979 to Mukul Sharma (a science Writer and journalist) and Aparna Sen (an Actress and film director). She has an elder sister, Kamalini Chatterjee. Sen Sharma's maternal grandfather, Chidananda Dasgupta, was a film critic, scholar, professor, Writer and one of the co-founders of the Calcutta Film Society. Her grandmother Supriya Dasgupta was a cousin of legendary modern Bengali poet Jibanananda Das.

Sen Sharma made her debut as a child Artist in the Bengali film Indira (1983). In 2000, she made her adult debut in the Bengali film Ek Je Aachhe Kanya, in which she played a negative character. It was followed by a role in Rituparno Ghosh's acclaimed film Titli, opposite Mithun Chakraborty and her mother Aparna Sen.

In 2001, she starred in the English-language film Mr. and Mrs. Iyer, directed by Aparna Sen. The film performed well mainly in multiplexes and was a major critical success. Sen Sharma's performance as a Tamil housewife and her mastery of the accent were received well and she was awarded the National Film Award for Best Actress. Her performance was later included in the 2010 issue of the "Top 80 Iconic Performances" by Filmfare.

This was followed by the National Film Award-winning social film, Page 3 (2005). Her role of a smart Journalist drew praise and she became a more familiar face to the movie-going public.

In late 2007, Sen Sharma acted in two movies under the Yash Raj Films banner. She noted her excitement toward these two projects as these were the first films in which she had to lip-sync for songs. In the first one, Laaga Chunari Mein Daag, a drama directed by Pradeep Sarkar, she portrayed the character of a Banaras small town young woman, Chutki, alongside Rani Mukerji. The film was a critical and commercial failure in India, even though her performance was received well. The second one was Aaja Nachle, which was widely promoted as the comeback film of Madhuri Dixit. The film did not do well. Rajeev Masand from CNN-IBN noted her performance in the film as being "...nothing short of fantastic. Her greatest strength is that she isn't afraid of making a fool of herself and she doesn't worry about being laughed at. As a result, her performance in Aaja Nachle is fearless and uninhibited."

In 2008, Sen Sharma starred in Dil Kabaddi. She starred in a short film (How Can It Be?) directed by Mira Nair for a movie project called 8, which was screened at several film festivals in 2008 before having a theatrical release.

In June 2009, Sen Sharma starred onstage first time at Atul Kumar's The Blue Mug alongside Rajat Kapoor, Vinay Pathak, Ranvir Shorey and Sheeba Chadha. In 2010, the play was toured around the nation and abroad.

Sen Sharma started dating actor and co-star Ranvir Shorey in 2007. The couple got married on 3 September 2010 in a private ceremony. The Times of India reported that Sen Sharma gave birth to her first child, Haroon, on 15 March 2011 at a South Mumbai hospital. Ranvir and Konkona announced their separation in September 2015. They still remain friends and share the custody of their son.

In 2011, Sen Sharma played the leading role in Aparna Sen's Iti Mrinalini, reportedly a semi-autobiographical film directed by the acclaimed Indian Director Aparna Sen, also Konkona's mother. She will also appear in Amitabh Verma's Jackpot opposite Ranvir Shorey, in Suman Mukherjee's adaptation of Shesher Kobita and Goutam Ghose's Shunyo Awnko.

In 2013, Sen Sharma starred in Balaji Telefilms' Ek Thi Daayan, directed by newcomer Kannan Iyer and produced by Vishal Bhardwaj and Ekta Kapoor. The movie also stars Emraan Hashmi, Kalki Koechlin and Huma Qureshi, and the film itself is inspired by the short story written by her father Mukul Sharma. She has also played a lead role in Aparna Sen's Goynar Baksho.

In 2015, Sharma starred in the Bengali film Kadombori as Tagore's sister-in-law and also played Lakshmi Das, the wife of Gour Hari Das - an Odisha freedom fighter who spent 32 years attempting to convince the government of his patriotism. In October, she played a character based on Nupur Talwar in Vishal Bhardwaj's film Talvar regarding the 2008 Noida Double Murder case. The film premiered at the Toronto Film Festival to extensive critical acclaim for Sharma and her co-stars Irrfan Khan and Neeraj Kabi, and also became a sleeper hit in India. In the same year she played the role of Nayantara in a short film 'Nayantara's necklace'

In 2016, Sharma is working on A.R. Murgadoss' film entitled Akira, where she will be playing a cop alongside Sonakshi Sinha.

In 2017 her directorial debut 'A death in the Gunj' released (2 June 2017) which starred Vikrant Massey, Kalki Koechlin in pivotal roles. The film was critically acclaimed and won her the best Director award in the New York Indian film festival and also in the MAMI film festival. In July, her long-awaited Lipstick under my burkha released, directed by Alankrita Srivastava. The film garned positive reviews and did well at the box office too. Her next project tilted Scholarship alongside Kalki Koechlin is in pre production.