Kaur was born in Pilani, Rajasthan. Her father was an Indian Army officer, and she has a younger sister, Rubine, who is a Psychologist based in Bangalore. Her family lived in Patiala, and she studied at Yadavindra Public School, Patiala. In 1994, her father was abducted and killed by Kashmiri militants. Thereafter, her family moved to Delhi-suburb, Noida, where she grew up and attended Delhi Public School, Noida. Later, she studied at Shri Ram College of Commerce, Delhi University, and began working in local theatre.

Kaur was launched in a two-part music video for the songs "Tera Mera Pyar" by Kumar Sanu and "Yeh Kya Hua" by Shreya Ghoshal in 2004. The videos were directed by writer-editor Apurva Asrani. She also did TV advertisements.

Kaur made her film debut with a small role in an English film, One Night with the King (2006), which was shot in Rajasthan. Her Hindi film debut came with Peddlers in 2012, produced by Anurag Kashyap. The film was screened at Cannes Film Festival to good reviews.

After her studies, Kaur moved to Mumbai and worked as a print model. She began working as a theater Actress appearing in plays such as Baghdad Wedding (2012), All About Women and Red Sparrow, working with Directors like Sunil Shanbag and Manav Kaul.

Kaur attended the Cannes festival for the second time for the epistolary romantic film The Lunchbox (2013). The film emerged as a commercial success and was critically acclaimed. Kaur received rave reviews for her portrayal of a lonely wife who begins a friendship with a man (played by Irrfan Khan) through letters. Raja Sen of Rediff.com said of Kaur's performance: "It is a disarmingly natural performance that is impossible to forget and difficult to analyse, and in this limited space one may merely express admiration." Jay Weissberg of Variety called her a "radiant presence" and Pratim D. Gupta of The Telegraph said that "Nimrat strips off all the sentimentality to attach dignity and grace to the character. This one’s a sparkling debut."

In 2014, Kaur appeared in a supporting role in the fourth season of the American TV series Homeland. The same year she committed to star with Rajkummar Rao in an untitled psychological drama to be directed by Saurabh Shukla.

In 2015, Kaur played the recurring role of Inter-Services Intelligence agent Tasneem Qureshi in the fourth season of the American television series Homeland. She then costarred with Akshay Kumar in the war thriller Airlift. In 2016, Kaur began portraying Rebecca Yedlin in the second season of the American television series Wayward Pines.

In 2016, she acted in the war drama Airlift, alongside Akshay Kumar. Based on the civil operation of evacuation of Indians based in Kuwait during the Iraq-Kuwait war, the film was released on 22 January to mostly positive reviews. Rajeev Masand in his review wrote: "For the most part, the film feels authentic, and Nimrat Kaur blends right in. Just a wee bit awkward in the early scenes, she comes into her own by the time she must deliver a scathing monologue during a crisis of faith over her husband’s actions." The film was a financial success. Kaur also began portraying Rebecca Yedlin in the second season of the American television series Wayward Pines in 2016.