Dutta was born to a Punjabi father and an Anglo-Indian mother in Ghaziabad, Uttar Pradesh. Her father is Wing Commander L.K. Dutta (retired) and her mother is Jennifer Dutta. She has an elder sister, Sabrina, who serves in the Indian Air Force and younger sister Cheryl. Composer/DJ Nitin Sawhney is a cousin of Lara Dutta.
The Dutta family moved to Bangalore in 1981 where she completed high school from St. Francis Xavier Girls' High School and the Frank Anthony Public School. She graduated with a degree in economics and a minor in communications from the University of Mumbai. She is fluent in English and Hindi but can also speak Punjabi and Kannada.
Dutta won the annual Gladrags Megamodel India competition in her native India in 1995, thus winning the right to enter the 1997 Miss Intercontinental Pageant, in which she took first place. Later, she was crowned Femina Miss India Universe in 2000.
At Miss Universe 2000 in Cyprus, she achieved the highest score in the swimsuit competition and her finalist interview score was the highest individual score in any category in the history of the Miss Universe contest, as her interview saw a majority of the judges giving her the maximum 9.99 mark.
After her final question, in which she delivered a defense of the Miss Universe contest (and other beauty pageants), she became the second Indian Miss Universe. Dutta's win led to her appointment as a UNFPA Goodwill Ambassador in 2001. In the same year, Priyanka Chopra and Dia Mirza won their respective Miss World and Miss Asia Pacific titles which gave India a rare triple victory in the world of beauty pageants. She signed up for the Tamil film, Arasatchi in 2002, but due to financial problems, it was only released in mid-2004. She made her Hindi debut in 2003 with the film Andaaz which was a box office success and won her a Filmfare Best Female Debut Award. She then went on to appearing in Bardaasht, which failed to do well at the box office. Her next release Aan: Men at Work was also a flop in India. Insan, Elaan and Jurm also ended up failing to do well at the box office. She later appeared in Masti.
In 2005, Sania Mirza and Dutta both participated in Kaun Banega Crorepati (season 2) on 13 November 2005.
In 2005, Dutta appeared in Kaal, which was a moderate success at the box office. Dutta then appeared in 2005's biggest hit, No Entry opposite actors Anil Kapoor, Salman Khan, Fardeen Khan, Bipasha Basu, Esha Deol and Celina Jaitley. She next appeared in Dosti: Friends Forever which was only an average grosser in India, however became the biggest hit of the year (for a Bollywood film) in overseas markets.
In 2006, Dutta appeared alongside Akshay Kumar in Bhagam Bhag, which was one of the biggest hits of the year, as it collected over ₹400 million (US$6.2 million) in India alone. Her first release of 2007 was Shaad Ali's Jhoom Barabar Jhoom. The film was a box office failure in India but did better overseas, especially in the U.K.
Her later release, Partner became a "Blockbuster" in India and became the third biggest grosser of the year. Dutta made a special appearance in Om Shanti Om. In 2008, Dutta lent her voice for the animated film, Jumbo. However, the film failed to do well at the box office. She made a special appearance in Rab Ne Bana Di Jodi. Her 2009 release, Blue, was one of the most expensive movies of Indian cinema. Dutta had initially walked away from the project because the movie was entirely shot in the ocean and she did not know how to swim. However the male protagonist Akshay Kumar encouraged her in learning how to swim and she immediately started training with a special coach. Blue was released on 16 October 2009. She stated that "The moment I got to know of it, I called Akshay and told him that I wouldn't be able to accept the assignment. He knew the reason behind my decision. Not many people are aware that I had almost drowned while shooting for Andaaz, Akshay had rescued me. When I reminded him I couldn't swim, he told me to forget my phobia and learn swimming pronto," said Dutta. "Today, I feel Blue has not merely made me overcome my phobias, but has also taught me something that will stay with me for the rest of my life".
Despite a promising opening, the film failed to do well at the box office. She also appeared in Do Knot Disturb, which took a good start at the box office, however dropped in the coming days and failed to do well. Her 2010 release Housefull was a major success across India. She starred opposite Akshay Kumar, Arjun Rampal, Deepika Padukone, Jiah Khan and Riteish Deshmukh. It was the fifth biggest hit in the country as it collected ₹1.14 billion (US$18 million) at the box office.
In 2011, her first movie as a producer, Chalo Dilli was released. The film was a decent success, as it was made on a modest budget of ₹50 million (US$780,000). Moreover, Dutta's performance in the film was praised by prominent critics. She did an item number and had an extended special appearance in the movie Don 2 and the film was a major success especially Lara's item number.
Following her post-pregnancy break from Hindi cinema, Dutta signed a movie titled David. Filming started by August 2012 and she will have a very important role in the movie according to its director, Bejoy Nambiar. The film released 1 February 2013 and receive mixed reviews. She recently signed a No Entry sequel titled No Entry Mein Entry.
Lara Dutta is active in yoga, and offers a number of videos on YouTube, particularly for pre-natal yoga.
Lara Dutta had a nine-year relationship with Kelly Dorji. In September 2010, she got engaged to Indian tennis player, Mahesh Bhupathi. They married on 16 February 2011 in a civil ceremony in Bandra. and later followed it by a ceremony on 20 February 2011 at Sunset Point in Goa. On 1 August 2011, Dutta confirmed that she was pregnant with their first child. Their daughter was born in January 2012.