Kapoor was born on 26 June 1985 in Mumbai, Maharashtra to the Hindi film producer, Boney Kapoor and the entrepreneur Mona Shourie Kapoor. He is the grandson of filmmaker Surinder Kapoor. He is the nephew of actors Anil Kapoor, Sanjay Kapoor and producer Sandeep Marwah, and the first-cousin of actress Sonam Kapoor, actor Mohit Marwah and producer Rhea Kapoor. He has a sister Anshula Kapoor. The actress Sridevi is his stepmother, and he also has two half-sisters, Jahnavi and Khushi Kapoor. When asked in an interview about his father's second marriage, Kapoor said: "When we were kids, it was difficult. But what can you do? How long will you complain? You have to accept what is, take it on your chin, and move on."
Kapoor was educated at the Arya Vidya Mandir school in Mumbai, which he attended till his twelfth grade. After failing his twelfth grade examinations, he quit his studies. In his teens and early twenties, Kapoor suffered from obesity and approximately weighed 140 kg; he later said that due to his condition, he used to be "sloppy, grumpy" and "under-confident". Kapoor's first job in the film industry was as an assistant director on Nikhil Advani's Kal Ho Naa Ho in 2003. He also assisted Advani on his next directorial Salaam-e-Ishq: A Tribute to Love (2007), and worked as an associate producer on two of his father's productions—No Entry (2005) and Wanted (2009). Kapoor was then signed on for a three-film contract with Yash Raj Films, a leading production company in India.
Kapoor made his acting debut in 2012 with Habib Faisal's crime drama Ishaqzaade opposite Parineeti Chopra, a critical and commercial success. Kapoor's role was that of Parma Chauhan, a chauvinistic brat who seduces the daughter of a rival family. Taran Adarsh of the entertainment portal Bollywood Hungama wrote of his performance: "Arjun Kapoor makes a fantastic debut. He has a peerless body language and a 'I-don't-give-a-damn' kind of an approach in the movie. He comes across as fiery and rustic and at the same time self-assured and assertive in this reckless and intrepid character". Kapoor then portrayed dual roles in Atul Sabharwal's crime thriller Aurangzeb (2013), a commercial failure. Critic Rohit Vats of CNN-IBN said that Kapoor was successful in "conveying the cynicism of his role" but criticised his "over-the-top" approach in certain sequences.
While promoting the film, Arjun aforesaid that Sonam Kapoor happens to be his favorite relative. IANS quoted him as locution, “Sonam is my favorite cousin. we each are of comparable age. we tend to each has gone to an equivalent college and from the start, I’m terribly protecting of her and can continually be in my life”. Arjun Kapoor Says, I am very protective of Sonam Kapoor and will always be in my life.
In 2014, Kapoor's first two releases were highly successful. He first played opposite Ranveer Singh and Priyanka Chopra in Gunday, an action thriller from director Ali Abbas Zafar. The film tells the fictional story of two coal bandits (played by Kapoor and Singh) who rise up to become the most powerful goons of Calcutta in the 1980s. Writing for India Today, Rohit Khilnani attributed the success of the film to the chemistry between Kapoor and Singh. With a worldwide revenue of over ₹1 billion (US$16 million), Gunday proved to be a box-office success.
After portraying roles in three consecutive crime films, Kapoor featured in the romantic comedy 2 States alongside Alia Bhatt. The film was an adaptation of Chetan Bhagat's novel of the same name, and narrated the story of two IIM Ahmedabad students who encounter trouble in convincing their parents to approve of their relationship. Critic Sarita Tanwar of Daily News and Analysis reviewed that "Arjun, who doubles as a narrator impresses with a role totally unlike anything he has done before". Kusumita Das of the Deccan Chronicle added that he "gets to show his range as an actor as his character is deftly explored as the son, the lover and the prospective son-in-law. The actor leaves an impact as a devoted son to his mother and an estranged one to his father." The film emerged as a major commercial success, earning over ₹1 billion (US$16 million) in domestic ticket sales.
Kapoor's third film release of 2014 was Homi Adajania's satirical English language film Finding Fanny, alongside Deepika Padukone, Naseeruddin Shah, Dimple Kapadia and Pankaj Kapur. Set in Goa, the film tells the story of five dysfunctional friends who set out on a road trip in search of a woman named Fanny. The film met with critical acclaim; writing for Mid Day, critic Shubha-Shetty Saha cited Kapoor's portrayal as his best performance to date, adding that he "plays his 'boy lost in the woods' character with surprising ease and competence". The action drama Tevar (2015) saw Kapoor play opposite Sonakshi Sinha as Pintoo, a lovable hooligan. The film was a remake of the Telugu film Okkadu (2003) and was produced by his father, Boney Kapoor. Writing for Rediff.com, critic Raja Sen criticised the film as "yet another of those mindless South remakes". The film failed at the box office.
The year 2016 saw Kapoor feature as the host of the seventh season of the television reality show Fear Factor: Khatron Ke Khiladi. He then took on the part of a stay-at-home husband in R. Balki's Ki & Ka (2016), a romantic comedy about gender stereotypes starring Kareena Kapoor. Ananya Bhattacharya of India Today considered Kapoor's performance to be "lazy in parts and too forced in others" though Sarita Tanwar of Daily News and Analysis thought that he was "immensely likable" in the part and commended him for keeping his character "real without making him wimpy". Despite receiving mixed reviews from critics, Ki & Ka was a commercial success, earning over ₹1 billion (US$16 million) worldwide. As of September 2016, Kapoor is filming with Shraddha Kapoor for Half Girlfriend, a film adaptation of the novel of the same name by Chetan Bhagat. He has also committed to star in Anees Bazmee's film Mubarakan alongside his uncle Anil Kapoor, as well as Ileana D'Cruz and Athiya Shetty.
Kapoor is a celebrity endorser for various brands and products, including Hrithik Roshan’s ISL FC Pune City. In 2015, he supported the Earth Hour. Philips also roped him as the brand ambassador for its ‘Male Grooming’ business. He is also a brand ambassador for Flying Machine and Royal Stag along with Ranveer Singh. Kapoor co-hosted the IIFA Awards ceremony in 2015 with Singh.