Raised in Calcutta, Kiran Rao did a bachelor's degree in Economics while being actively involved in college theatre and literary activities. She went on to do her masters degree in Mass Communication from Mass Communication Research Centre at Jamia Millia Islamia University in New Delhi.

She moved to Bombay in 1998 and worked as an Assistant Director on numerous commercials. The new millennium was the start of her association with the world of cinema, when she joined the crew of the film 'Lagaan' as an Assistant Director. She went on to work as an AD on a number of commercials, and feature films like 'Monsoon Wedding' and 'Swades'.

In 2006 she began to work with Aamir Khan Productions full time to oversee two feature films - "Taare Zameen Par" and "Jaane Tu Ya Jaane Na" - as Associate Producer, with her husband Aamir Khan.

She is currently trying to extricate herself from production to work on developing her own feature film project as director.