Bendre started out as a model before being selected for the "Star Dust Talent Search". She was invited to Mumbai and received training from a variety of top actors and performers of the Indian film industry. Her first role was in Aag (1994) opposite Govinda. The movie flopped, but she got noticed. And she got two awards for Filmfare Award for Lux New Face of the Year and Star Screen Awards Most Promising Newcomer. Though she initially struggled to be a successful Actress, she was eventually given critical acclaim for her performances in Diljale in 1996, followed by Bhai (1997), Sarfarosh, Zakhm, Duplicate, Kadhalar Dhinam (Tamil film), Hum Saath-Saath Hain: We Stand United (1999), Tera Mera Saath Rahen (2001) and Anahat (2003) among others. She is also known for being one of the few actresses who acted opposite all four Khans (Salman, Aamir, Shahrukh and Saif). She has also starred opposite Bollywood actors such as Akshay Kumar, Sunil Shetty and Ajay Devgn. She also starred opposite Telugu matinee idol Chiranjeevi in films such as Indra and Shankar Dada M.B.B.S..

In addition to her acting performances, she was also recognized as a graceful Dancer through films such as Gaddar, Sapoot, Bombay, Lajja and Major Saab. In 2003, she made a special appearance as Shahrukh Khan's Doctor, named Dr. Priya in Kal Ho Naa Ho (produced by Karan Johar), which also starred Saif Ali Khan and Preity Zinta. Bendre also starred in the theatre in a play called Aap Ki Soniya. She had also welcomed Michael Jackson on his arrival in India in traditional Maharashtrian nauvari sari and she performed aarti for Jackson on November 1, 1996.

Sonali was born in Mumbai. She studied at Kendriya Vidyalaya Malleswaram, Bangalore and Holy Cross Convent High School, Thane. Thereafter she went to Welham Girls School, Dehradun. She married film Director Goldie Behl on 12 November 2002. On 11 August 2005, she gave birth to her son, Ranveer, at the Breach Candy Hospital.

She also hosted a dance show on television named Kya Masti Kya Dhoom....! and was one of the judges of Indian Idol on Sony Entertainment television. She also hosted the 50th Filmfare Awards with Saif Ali Khan and Farida Jalal on 26 February 2005. She was a judge on Mr & Mrs Television, Indian Idol 4 and India's Got Talent. In 2012, she also appeared as a judge on the reality dance series Hindustan Ke Hunarbaaz, on Life OK, along with Choreographer Terence Lewis.

At the end of June 2012, Sonali Bendre was rumoured to quit judging India's Got Talent 4. She was said to be likely replaced by Ritesh Deshmukh. However, later, it turned out she opted out of the show in order to give her dates for her comeback vehicle Once Upon a Time in Mumbai Dobaara!; for some period, the channel hasn't spoken to Bendre. Later, at the beginning of July, Sonali Bendre announced that she would be making her comeback by portraying a character connected to the one played by Akshay Kumar in the movie. Her part was described by the Director Milan Luthria: "Sonali's character is called Mumtaz. The name spells enigma and is very crucial to the plot of the film. The character doesn't fit into the usual mould of a mother or a sister or bhabhi but has an identity of its own. That is what makes it special. And that's why Sonali agreed to be a part of the film." She took a sabbatical from movies after 2004, then after giving birth to her son she started doing television. She refused to star in many movies, saying she wanted to focus on her family, especially her son. But after she was offered Once Upon a Time in Mumbaai Dobaara!, she said yes because of her friendship with Ekta and Shobha Kapoor and the fact she worked with both Luthria (Chori Chori) and Kumar (in Tarazu, Sapoot, Angaaray, Keemat) before.

She also appeared as a judge on India's Best Dramebaaz on Zee TV. She is next appearing as narrator on the TV Show Mission Sapne to be aired on Colors in March to April 2014. Sonali has been finalized to play the lead role in Star Life OK's television serial Ajeeb Dastaan Hai Yeh. The serial started airing in October 2014. She plays the main character called Shoba Sachdev.