Tanna was born and brought up in a Gujarati family. She lives with her mother, and is very close to her, as her father died in October 2012.
Tanna started dating actor Upen Patel in 2014 when they met inside the Bigg Boss house and later was engaged to him. In 2016, they both split up.
Tanna appeared in Balaji Telefilms' soap opera Kyunki Saas Bhi Kabhi Bahu Thi (July 2000 - November 2008), where she played the character Indu. She appeared in Balaji Telefilms' drama production, Kahi To Milenge (November 2002 - 2003).
Tanna worked as the female lead for the TV series Koi Dil Mein Hai (December 2003 - February 2005) as Krutika. Tanna signed up with project while still working for Kyunki Saas bhi kabhi bahu thi, as her role in Kyunki was not that of a major character. Moreover, Kkoi Dil Mein Hai was a weekly show. Tanna worked for the TV program Ek Ladki Anjaani Si (November 2005 – September 2007) playing the negative character Ayesha. Tanna was also part of Rajshri Productions show Pyaar Ke Do Naam: Ek Raadha, Ek Shyaam (April 2006 – September 2006).
BR Films signed her up for their drama TV series, Viraasat (June 2006 – July 2007). She played the role of Natasha, a secretary. In 2008, Karishma participated in the dance show Zara Nachke Dikha.
In September 2006, Tanna made her theater debut with the Hinglish farce/romantic comedy Perfect Wedding, directed by Vandana Sajnani. The work was adapted from Robin Howdon's British play of the same name. Tanna participated in stage-based comedy TV series Comedy Circus that started in June 2007. She later came back in Comedy Circus Mahasangram in February 2010.
Tanna hosted a magic-based reality TV show, India's Magic Star, that went on air in July 2010. She has also acted in the children's television program, Baal Veer (October 2012 – 2013), playing the role of Rani Pari.
Tanna was a celebrity contestant in the popular controversial Colors show, Bigg Boss 8, which started airing in September 2014. She spent full 4 months inside the house and became a finalist and the first runner up. In 2015, Tanna participated in seventh season of dance couple reality show Nach Baliye along with Upen Patel. In November 2015, Karishma appeared as a celebrity guest in Star Plus talk show Aaj Ki Raat Hai Zindagi which was hosted by Amitabh Bachchan.
In March 2016, Karishma made a guest appearance in the popular stunt reality show Fear Factor: Khatron Ke Khiladi in its seventh season. Tanna appeared as a celebrity guest in the popular comedy show Comedy Nights Bachao which aired on Colors TV one with Upen in February and later in the same year in August 2016 for promoting Jhalak Dikhhla Jaa. She again made a small cameo appearance in Comedy Nights Bachao along with Helly Shah for one episode. Karishma participated in the celebrity dance reality show Jhalak Dikhhla Jaa in 2016. Tanna is currently playing the role of a naagin in Life OK's show Naagarjuna – Ek Yoddha. In January 2017, Tanna was judging BIG Magic's reality show Big Memsaab along with Sambhavna Seth, Pritam Singh in 2017.
Tanna made her Bollywood debut with the December 2005 film Dosti: Friends Forever, playing the role of Nandini Thapar. Tanna's second film was a Kannada language movie, I Am Sorry Mathe Banni Preethsona, which was released in June 2011. Tanna played the lead actress role of Chethana.
In September 2013, Grand Masti, a Bollywood sex comedy and a sequel to April 2004 film, Masti was released. Tanna has signed for Tina and Lolo. Tanna's character had been earlier offered to Minissha Lamba, but Lamba opted out as the script required her kissing Sunny Leone.
Tanna has acted in several television advertisements, including for Stayfree, Lifebuoy and Nirma.