Madhur is cousin to the late Raghu Raj Bahadur (1924–1997), considered to be one of the world's top theoretical statisticians, and his sister, the late Sheila Dhar (1929 – 2001) . In her memoirs Here's Someone I'd Like You to Meet (1995), Sheila Dhar recounts her difficult relationship with her father, referred to as Shibbudada in Madhur's own memoirs, Climbing the Mango Trees.

At school, the subject of domestic science included learning dishes like blancmange, whose bland taste drove Madhur to dismiss the cookery lessons as preparing "British invalid foods from circa 1930". However, at the time of the practical examination, her class was asked to make a dish from an assortment of potatoes, tomatoes, onions, garlic, ginger and Indian spices in a pot over wood to be lit with matches. Madhur did her best but guessed that she failed the subject of domestic science altogether.

Madhur Jaffrey was born Madhur Bahadur on 13 August 1933 in Civil Lines, Delhi, into a Kayastha Hindu joint family. She is the fifth of six children of Lala Raj Bans Bahadur (1899–1974) and his wife, Kashmiran Rani (1903–1971). Madhur's grandfather, Rai Bahadur Raj Narain (1864–1950), had built a sprawling family compound, named Number 7 Raj Narain Marg, by the Yamuna river amid fruit orchards.

In 1947, Madhur experienced first-hand the effects of the partition of the British Indian Empire. At school, her classmates split into two on the issue of partition; the Muslim girls supported the idea while the Hindus were against it. On August 15 she watched the transfer of power at India Gate and got a clear glimpse of Jawaharlal Nehru and Lord Mountbatten coming down Rajpath in an open horse carriage. The massive multi-directional migration that began almost immediately afterwards caused riots and killing in Delhi. The male members of her family guarded their house with guns that they had previously used only for hunting game. At school, all her Muslim classmates left without a farewell. In 1948, a few days before Mahatma Gandhi was shot dead, she attended one of his prayer meetings at Birla House and sang bhajans. She heard the news of his assassination on the radio, followed by Jawaharlal Nehru's address later that night, "the light has gone out of our lives, and there is darkness everywhere." She saw Gandhi's funeral procession at Rajpath and witnessed his cremation at Rajghat.

From 1950 to 1953 Madhur attended Miranda House, a women's college, where she gained a B.A. degree in English Honours with a minor in philosophy.

During this period, Madhur also met Ruth Prawer Jhabvala, a British Novelist who had moved to Civil Lines, Delhi after marriage to Cyrus Jhabvala, an Indian Architect, in 1951. Madhur answered a casting call by Prawer Jhabvala and worked with her on All India Radio plays. The protagonists of Prawer Jhabvala's first novel, To Whom She Will (1955), a young couple who work at a radio station in Delhi and fall in love, were based on Madhur and Saeed Jaffrey. The novel was published in America the following year as Amrita (1956).

After graduation from Miranda House in 1953, Madhur joined All India Radio, where Saeed Jaffrey was an announcer. She worked as a disc jockey at night. Saeed and Madhur fell in love and dated at Gaylord, a restaurant in Connaught Place.

In late 1955, Saeed Jaffrey won a Fulbright scholarship to study drama in America the following year. In spring 1956, he approached Madhur's parents in Delhi for her hand in marriage but they refused because they felt that his financial prospects as an actor did not appear sound. Madhur got her father's permission to marry Saeed eventually. In summer 1956, Saeed flew to London on his way to America and proposed to Madhur. She refused but gave him a tour of RADA where she pointed out English actors, such as Peter O'Toole, whom she thought would soon have a high profile in the profession. Soon afterwards, Saeed boarded the RMS Queen Elizabeth to sail across the Atlantic Ocean from Southampton to New York City.

Madhur found British food and Indian restaurants of that time to be terrible. The grey roast beef and overcooked cabbage with watery potatoes served at the fifth floor canteen of RADA were unappetizing. She wrote to her mother, begging her for recipes of the home cooked meals of her childhood. Her mother responded with recipes written in Hindi on onionskin paper in letters sent via airmail. The very first letter was dated 19 March 1956 and included recipes for meat spiced with cinnamon, cardamom and bay, a cauliflower dish, and egg curry with hard-boiled eggs. The first recipe that she tried was jeera aloo (potatoes with cumin). She bought pumpernickel from a neighborhood Jewish bakery as a substitute for chapatis.

In September 1957 Madhur stayed in Washington, D.C. with Saeed Jaffrey, who had returned there to rehearse for the 1957–58 season with the National Players, a professional touring company that performed classical plays all over America. Midway through the tour, Saeed returned to Washington DC from Miami to marry Madhur in a modest civil ceremony. The next day, they traveled to New York City where Madhur got a job as a tour guide to the United Nations while Saeed did public relations work for the Government of India Tourist Office. They lived on West 27th Street, between Sixth and Broadway. Between 1959 and 1963 Madhur and Saeed had three daughters, Meera, Zia and Sakina.

In September 1958 Ismail Merchant arrived from Bombay to attend the New York University Stern School of Business. Merchant had heard of Saeed from his theater days in Delhi. He himself wanted to produce plays and make movies. Saeed was then playing the lead at Lee Strasberg's Actors Studio in an Off-Broadway production of Blood Wedding, a tragedy by Spanish dramatist Federico García Lorca. Merchant approached Saeed with a proposal to put on a Broadway production of The Little Clay Cart starring the Jaffreys. Saeed took him home for dinner, where he met Madhur who was heavily pregnant with the Jaffreys' first child.

The following year, James Ivory, then an emerging film maker from California, approached Saeed Jaffrey to provide the narration for his short film about Indian miniature painting, The Sword and the Flute (1959). Saeed brought Ivory home for dinner and introduced him to Madhur. When The Sword and the Flute screened in New York City in 1961, the Jaffreys encouraged Merchant to attend the screening, where he met Ivory for the first time. They subsequently met regularly at the Jaffreys' dinners and cemented their relationship into a lifetime partnership, both personal and professional. The Jaffreys planned to go back to India, start a traveling company and tour with it. They would often discuss this idea with James Ivory and started writing a script in his brownstone on East 64th Street.

Ironically, she did not cook at all as a child growing up in Delhi. She had almost never been in the kitchen and almost failed cooking at school. It was only after she went to London at the age of 19 to study at RADA that she learned how to cook, using recipes of familiar dishes that were provided in correspondence from her mother. Her Editor Judith Jones claimed in her memoirs that Jaffrey was an ideal cookbook Writer precisely because she had learned to cook childhood comfort food as an adult, and primarily from written instructions. In the 1960s, after her award-winning performance in Shakespeare Wallah, she became known as the "actress who could cook".

In 1962, she appeared in A Tenth of an Inch Makes the Difference by Rolf Forsberg. In 1969, she appeared in The Guide, based on the novel by R. K. Narayan, and in 1970, she appeared in Conduct Unbecoming, written by Barry England. In 1993, she appeared in Two Rooms by Lee Blessing. In 1999, she appeared in Last Dance at Dum Dum by Ayub Khan-Din. In 2004, Jaffrey appeared in Bombay Dreams on Broadway, where she played the main character's grandmother (Shanti). In 2005, she appeared in India Awakening by Anne Marie Cummings.

When Merchant and Ivory traveled to India to make The Householder (1963) they met Shashi Kapoor and his in-laws, the Kendals. Geoffrey Kendal and his wife, Laura Liddell, had a traveling theatre company, Shakespeareana, that performed plays by Shakespeare pan India. Combining the Jaffreys' original idea with the real-life Shakespeareana, Merchant and Ivory came up with their next film Shakespeare Wallah (1965). Ruth Prawer Jhabvala was persuaded to write a movie star role for Madhur. Saeed was dropped from the project because the Jaffreys' marriage had collapsed at this point.

Madhur traveled to India for the shooting of Shakespeare Wallah (1965). After the film's shooting was complete, Madhur lived in India with her children until Ismail Merchant decided that she needed to be at the Berlin International Film Festival because he had entered the movie in competition there. In Berlin, Madhur won the Silver Bear for Best Actress award. Sanford Allen, a Violinist she had met when she was a guide at the Lincoln Center for the Performing Arts in New York City, sent her a bunch of roses on her win. Madhur returned to New York City when the film was screened at the New York Film Festival. Madhur and Sanford Allen met again and decided to pursue a relationship seriously.

After an article about her and her cooking appeared in the New York Times in 1966, she received a book contract from an independent Editor to write a book on Indian cooking. Madhur started compiling all the recipes learnt by her through correspondence with her mother and adapted for the American kitchen. Due to a period of rapid consolidation in the American publishing industry, the book went to Harcourt Brace Jovanovich but got no attention there either. Madhur took the book to her friend, Ved Mehta, who in turn mentioned it to publisher André Schiffrin. Schiffrin passed on the book to Knopf Editor Judith Jones, who had championed Julia Child's cookbook at a time when no other publisher would touch it. Judith Jones snapped up the book immediately, only asking Madhur to add serving suggestions and menus for people not familiar with Indian cooking. In 1973 An Invitation to Indian Cooking was published, Madhur's first cookbook. During the 1970s, she taught classes in Indian cooking, both at the James A. Beard School of Cooking and in her Manhattan apartment. She was hired by the BBC to present a show on Indian cooking. In 1986, the restaurant Dawat opened in Manhattan using recipes that she provided.

In 1967, Madhur traveled to India to attend a black-tie premiere of Shakespeare Wallah in Delhi hosted by the British High Commissioner to India, John Freeman and his wife, Catherine. At the premiere she met Marlon Brando, an actor Madhur admired deeply for his method acting technique. Brando was in India to raise money for UNICEF and the film premiere also served as a fund-raiser. Later that year, Madhur shot scenes for Merchant Ivory's next film, The Guru (1969). Madhur returned from India with her children. The family, along with Sanford Allen, moved into a 14th-floor apartment in a Greenwich Village co-op. In order to better provide for her children, she became a freelance Writer for food and travel magazines, covering subjects as diverse as paintings, music, dance, drama, sculpture, and architecture.

She went on to act in further Merchant Ivory films like The Guru (1969), Autobiography of a Princess (1976), Heat and Dust (1983), directed by Ivory, and The Perfect Murder (1988). She starred as the title character in their film Cotton Mary (1999) and co-directed it with Merchant.

Jaffrey is the author of cookbooks of Indian, Asian, and world vegetarian cuisines. Many have become best-sellers; some have won James Beard Foundation awards. She has presented cookery series on television, including Madhur Jaffrey's Indian Cookery in 1982, Madhur Jaffrey's Far Eastern Cookery in 1989 and Madhur Jaffrey's Flavours of India in 1995. She lives in Manhattan and has a home in upstate New York. As a result of the success of her cookbooks and TV, Jaffrey developed a line of mass-marketed cooking sauces.

Madhur Jaffrey has appeared in Six Degrees of Separation (1993), Vanya on 42nd Street (1994) and Prime (2005). She starred in and produced ABCD (1999) and guest-starred in the Law & Order: Special Victims Unit episode "Name" as a Psychiatrist, and the Law & Order: Criminal Intent episode "The Healer" as a lecturer. In 1985, she was in the Hindi film Saagar where she played the role of Rishi Kapoor's grandmother. In 1992–94 she appeared with Billie Whitelaw in the British television series Firm Friends. In 1999, she appeared with daughter Sakina Jaffrey in the film Chutney Popcorn. In Cosmopolitan (2003), a film broadcast on PBS, she played a traditional Hindu wife who suddenly leaves her husband. She also starred alongside Deborah Kerr in the 1985 made-for-TV movie The Assam Garden. In 2009 she appeared with Aasif Mandvi in Today's Special, adapted from Mandvi's play about a sous chef who is forced to run his father's tandoori restaurant in Queens. In 2012 she played a Doctor in A Late Quartet who diagnoses Christopher Walken's character with Parkinson's Disease.

Zia Jaffrey is a part-time assistant professor of Creative Writing at The New School in New York City. She has written for newspapers like The New York Times and The Washington Post. Her work has also appeared in magazines like The Nation, Vogue, and Elle. She is the author of The Invisibles: A Tale of Eunuchs of India (1996) that explores the hijra community, whom she first encountered at a family wedding in Delhi in 1984. In 2013 she published The New Apartheid, a book on South Africa's AIDS epidemic.

Madhur has three daughters from her marriage to Saeed Jaffrey: Zia, Meera and Sakina. Saeed Jaffrey's autobiography Saeed: An Actor's Journey (1998) describes their relationship in the early years of his life.

In 2004 she was named an honorary Commander of the Order of the British Empire in recognition of her services to cultural relations between the United Kingdom, India and the United States, through her achievements in film, television and cookery.

Meera Jaffrey graduated from Oberlin College, Ohio, with a major in Chinese studies. She teaches in the Music Department of the Learning Community Charter School in Jersey City, New Jersey. In 2005 she traveled to China to shoot a documentary film, Fine Rain: Politics and Folk Songs in China, that explores China through its folk songs. Meera is married to Craig Bombardiere and the two have a son, Rohan Jaffrey.

Her childhood memoir of India during the final years of the British Raj, Climbing the Mango Trees, was published in 2006.

When Madhur was about 2 years old, her father accepted a position in a family-run concern, Ganesh Flour Mills, and moved to Kanpur as the manager of a vanaspati ghee factory there. In Kanpur, Madhur attended St. Mary’s Convent school along with her elder sisters, Lalit and Kamal. In kindergarten at the age of 5, she played the role of the brown mouse in a musical version of the Pied Piper of Hamelin. The family lived in Kanpur for 8 years until her grandfather's deteriorating health caused a move back to Delhi in 1944.