Khan made her acting debut in the low-budget adult Hindi film Yehi Hai High Society, which was released in March 2005. She subsequently started appearing in television commercials and other ad films.

In March 2007, Khan's TV commercial for the men's underwear brand, Amul Macho, showed her provocatively scrubbing and washing some underwear, simulating an orgasm. It created a strong controversy and was banned by the Indian government on the grounds of sexual profanity. Khan responded in an interview, "Forget about the ban and people taking out morchas (protests) against me and burning my posters in Bombay (Mumbai). At the end of it people from the creative field have loved it." The company re-hired Khan, shot a sequel to that commercial with a different theme, and released it in February 2008.

Khan's debut Tamil film Silambattam was produced by Lakshmi Movie Makers, and was released in December 2008. Silambarasan, the film's lead actor, who had previously signed and then dropped her for a role in his film Kettavan, called her again for the female lead role in Silambattam after seeing her ad with Shahrukh Khan. She said in an interview with The Hindu, "Silambarasan came to Mumbai looking for a fresh face for his film Silambattam. There he saw me and selected me. I knew I had to work hard to make it big in the Tamil film industry". Khan regards the film as her first break. She received praise for her portrayal of a talkative, tomboyish brahmin village girl named Janu in the film, and won the 2009 ITFA Best New Actress Award in Singapore.

In March 2010, her next Tamil film, Thambikku Indha Ooru was released. Later that year, Khan ventured into the Telugu film industry, appearing in Nandamuri Kalyan Ram's Kalyanram Kathi, which was released in November 2010. Khan's next release was the February 2011 bilingual thriller Gaganam / Payanam – shot in Telugu and Tamil, respectively – which was based on an aircraft high-jack theme.

In May 2011, Khan stepped into Kannada films with Golden Movies' Kool...Sakkath Hot Maga. In September 2011, her next Tamil film, Aayiram Vilakku, was released, in which Khan played the role of a Madurai girl. In the March 2012 Telugu film Mr. Nookayya Khan played the role of a waitress in a pub, adding glamour to the film. Khan made her Malayalam film debut with Climax that was loosely based on the Hindi film The Dirty Picture and she played the role of late South Indian Actress Silk Smitha. Khan was also signed up her sixth Tamil film, Thalaivan with Bas, which was produced by Blue Ocean Pictures.

In October 2012, Khan participated in the Indian Celebrity reality TV show Bigg Boss Season 6 as a contestant. Before entering the show, she said in an interview, "I am going to flaunt my age and the fact that I am the youngest. I am going into the house without any preparation. I want to be spontaneous and show the world the real me." She gained a lot of popularity from the audience and managed to stay in the show till the end, though she stood third in the show. She told PTI, "I am happy to have reached top three. I did not expect this."

She plays as daughter of main antagonist Danny Denzongpa in Bollywood film, Jai Ho, with the shooting of the film started in March 2013 in Dubai and released on 24 January 2014. Khan did the film Wajah Tum Ho opposite Sharman Joshi and Gurmeet Choudhary. The film was a flop at Box Office India. Her bold scenes with Gurmeet and Rajneesh Duggal in the film were much discussed after the trailer was released on YouTube. Khan did a special appearance in Toilet: Ek Prem Katha in which she was seen portraying the role of Akshay Kumar's girlfriend. Her upcoming film is Tom, Dick and Harry 2 in which she will share the screen alongside Aftab Shivdasani and Sharman Joshi.