She was born as Sahibzadi Zohra Begum Mumtaz-ullah Khan on 27 April 1912 into a traditional Muslim family in Rampur, Uttar Pradesh, India, to Mumtazullah Khan and Natiqua Begum, belonging to a Rohilla Pathan family of Rampur, Uttar Pradesh, India. She was the third of seven children – Zakullah, Hajrah, Ikramullah, Uzra (Uzra Butt), Anna and Sabira – and grew up in Chakrata, now in Uttarakhand (near Dehradun). She was a tomboy fond of climbing trees and playing games. Zohra lost vision in her left eye when she contracted glaucoma at the age of one. She was referred to a hospital in Birmingham where she was treated at a cost of £300.

While still in Europe, she received a telegram from Uday Shankar: "Leaving for Japan tour. Can you join immediately?" On 8 August 1935, she joined his troupe and danced across Japan, Egypt, Europe and the US, as a leading lady, along with French Dancer, Simkie. When Uday Shankar moved back to India in 1940, she became a Teacher at the Uday Shankar India Cultural Centre at Almora. It was here that she met her Future husband Kameshwar Segal, a young scientist, Painter and Dancer from Indore, eight years her junior, belonging to the Radha Soami sect.

She married Kameshwar Sehgal, a Hindu. There was initial opposition from her parents, but they eventually gave their approval for the union. They married on 14 August 1942. Jawaharlal Nehru was to attend the wedding reception, but he was arrested a couple of days earlier for supporting Gandhi's Quit India Movement.

Also in 1945, soon after her arrival, she joined the leftist theatre group, IPTA, acted in several plays, and made her film debut in IPTA's first film production, directed by Khwaja Ahmad Abbas, Dharti Ke Lal in 1946; she followed it up with another IPTA-supported film, Chetan Anand's Neecha Nagar. In the same year, it became the first Indian film to gain critical international recognition and won the Palme d'Or at the Cannes Film Festival.

The famous films she was part of include Neecha Nagar, Afsar (1946), Bhaji on the Beach (1992), The Mystic Masseur (2001), Bend It Like Beckham (2002), Dil Se.. (1998), Saawariya and Cheeni Kum (2007); and the TV serials The Jewel in the Crown (1984), Tandoori Nights (1985–87) and Amma and Family (1996). At the age of 90, she played the central character in the 2002 film Chalo Ishq Ladaaye. Considered the doyenne of Indian theatre, she acted with the Indian People's Theatre Association (IPTA) and Prithviraj Kapoor's Prithvi Theatre for 14 years. She has also acted in English-language films such as Bend It Like Beckham.

Her involvement remained mostly with the theatre, though she did do a few films in between. During their stay in Bombay, the couple came to know many celebrities, including Ebrahim Alkazi, in whose play Din Ke Andhere, she played "Begum Qudsia"; K.A. Abbas, in whose plays she acted at the IPTA; Chetan and Uma Anand in whose house the couple stayed when they first moved to Bombay, and his brother, Dev Anand. She did the choreography for several Hindi films, including Guru Dutt's Baazi (1951) and the dream sequence song in Raj Kapoor's film Awaara. Kameshwar, on the other hand, became an art Director in Hindi films and later tried his hand at film direction.

After her husband's death in 1959, Zohra first moved to Delhi and became Director of the newly founded Natya Academy. She then moved London on a drama scholarship in 1962. Here she met Ram Gopal, a India-born Bharatnatyam Dancer, and starting in 1963, worked as a Teacher in the "Uday Shankar style" of dance at his school in Chelsea, during the short period of its existence. Her first role for British television was in a BBC adaptation of a Kipling story The Rescue of Pluffles, in 1964. She also appeared in four episodes of Doctor Who during 1964-65, all of them, however, are currently lost. She also anchored 26 episodes of BBC TV series, Padosi (Neighbours; 1976–77). Her career in the next almost two decades remained sporadic, despite several small appearances in many films.

In London, Zohra got her first break in films and was signed by Merchant Ivory Productions. She appeared in The Courtesans of Bombay, directed by James Ivory in 1982. This paved the way for an important role as Lady Chatterjee in the television adaptation The Jewel in the Crown (ITV, 1984). Thus started the second phase of her career, as she went on to appear in The Raj Quartet, The Jewel in the Crown, Tandoori Nights, My Beautiful Laundrette, etc.

She returned to India in the mid-1990s and lived for a few months in Burdwan. At that time she acted in several films, plays and TV series. She first performed poetry at a memorial to Uday Shankar organised by his brother, Ravi Shankar in 1983, and soon took it in big way; she started getting invited to perform poetry at various occasions. She even traveled to Pakistan to recite verses for "An Evening With Zohra". Her impromptu performances of Punjabi and Urdu became a norm. After stage performances she was often requested by the audience to recite Hafeez Jullundhri's famous nazm, Abhi To Main Jawan Hoon.

In 1993, the critically acclaimed play Ek Thi Nani was staged in Lahore for the first time, featuring Zohra and her sister Uzra Butt now staying in Pakistan. A performance in its English version A Granny for All Seasons was held at UCLA in 2001. She became very active in Hindi films in grandmotherly roles in from 1996, with frequent appearances in high budget movies such as Dil Se, Hum Dil De Chuke Sanam, Veer Zara, Saawariya and Cheeni Kum. She was 90, when she did the film Chalo Ishq Ladaye in 2002, where she was the main central character of the film and Govinda played her grandson. The film Ishq Ladaye had her riding a bike and fighting the villains as well. In 2008, at the United Nations Population Fund (UNPF)-Laadli Media Awards in New Delhi, she was named Laadli of the century and the award ceremony was presided by the Chief Minister of Delhi, Sheila Dikshit.

In 2012, Kiran Segal, her daughter, wrote Zohra's biography titled "Zohra Sehgal: Fatty".

On 9 July 2014 she was admitted to the Max Hospital in South Delhi after being diagnosed with pneumonia. She died on 10 July 2014, aged 102, after suffering cardiac arrest and was cremated on 11 July at Lodhi Road crematorium, Delhi.

For a while, the couple worked in Uday’s dance institute at Almora. Both became accomplished Dancers and choreographers. Kameshwar composed a noted ballet for human puppets and choreographed the ballet Lotus Dance. When it shut down later, they migrated to Lahore in the near western India and set up their own Zohresh Dance Institute. The growing communal tension preceding the Partition of India made them feel unwelcome. They returned to Bombay, with one-year-old Kiran. By now, her sister Uzra Butt was already a leading lady with Prithvi Theatre. Ultimately, she too joined Prithvi Theatre in 1945, as an Actress with a monthly salary of Rs 400, and toured every city across India with the group, for the next 14 years.