Born in a Sindhi family in Karachi, British India on 2 September 1941, Sadhana was named after her father's favorite actress-dancer Sadhana Bose. Her father was elder brother of actor Hari Shivdasani, father of actress Babita.
The family migrated from Karachi during the post-Partition riots and settled in Mumbai. Her mother home-schooled her until she was 8 years old after which she studied at Auxilium Convent, Wadala and Jai Hind College.
Sadhana aspired to be an actress since childhood. Her father helped her enter films. In 1955 she played a chorus girl in the song "Mur Mur Ke Na Dekh Mur Mur Ke" in Raj Kapoor's Shree 420. When she was 15 years old, she was approached by some producers who had seen her act in a college play. They cast her in India's first Sindhi film titled Abaana (1958), where she played the role of Sheila Ramani's younger sister.
A photograph of her publicizing the film appeared in a movie magazine Screen. It was then that Sashadhar Mukherjee, one of Hindi cinema's leading producers at that time, noticed her. She joined Mukherjee's acting school along with her debutant co-star Joy Mukherjee, Sashadhar’s son. R. K. Nayyar, who had previously worked as assistant director on few films, directed this film. He also created her trademark look, called Sadhana cut, inspired from British actress Audrey Hepburn. The Filmalaya Production banner thus introduced Joy, Sadhana and her iconic hairstyle in their 1960 romantic film Love in Simla. The film was declared a hit at the box office and was listed in the top 10 films of 1960. During this period she would again work under the same banner opposite Joy in Ek Musafir Ek Haseena.
Alongside Love in Simla, Sadhana was signed by acclaimed director Bimal Roy for his satirical film on Indian democracy, Parakh. She portrayed a simple village girl in this multi-award-winning film. In 1961's other hit Hum Dono, she played the love interest of Dev Anand. This black-and-white film was colourized and re-released in 2011. Rediff.com in the film's review writes about Sadhana; "Her eyes, expressive and captivating, do most of the work, while she balances out her submissiveness with a firm tongue." The duet "Abhi Na Jaao Chhodkar" from the film Hum Dono is regarded as "the most romantic song" by actor Shah Rukh Khan and director Sanjay Leela Bhansali.
Author Amit Chaudhuri in an essay comparing cultures says that Sadhana's curious expressions in the song denote listener's peculiar ecstasy while in other cinemas it would mean sex or love. In 1962, she was again paired with Dev Anand in Asli-Naqli by director Hrishikesh Mukherjee. The same year saw director-screenwriter Raj Khosla cast her opposite Joy in Ek Musafir Ek Hasina. Khosla would again work with Sadhana to make a suspense thriller trilogy.
In 1963, Sadhana played her first role in a technicolour film Mere Mehboob directed by H. S. Rawail. The film was the "blockbuster" of 1963 and ranked in the top 5 films of the 1960s.
In 1964, she played a double role in the first of the suspense-thriller trilogy, Woh Kaun Thi? This white-sari-clad performance opposite Manoj Kumar earned her first Filmfare nomination as Best Actress. Through this role she got to be part of Lata Mangeshkar – Madan Mohan’s songs "Naina Barse" and "Lag Ja Gale". Rediff.com called her a show-stopper "with an intriguing Mona Lisa-like smile". The film was a box office "Hit". Raj Khosla cast her in two more successful mystery films, Mera Saaya (1966) and Anita (1967) thus making her famous as the "Mystery girl". Mera Saaya, a box office "Super Hit" courtroom drama film again saw her playing a double role, now opposite Sunil Dutt. The song "Jhumka Gira Re" sung by Asha Bhosle and composed by Madan Mohan saw Sadhana perform dance steps choreographed by Saroj Khan. Khan was then an assistant to dance director B. Sohanlal. The song became so popular that excited audience in cinema halls used to throw coins at the screen, and is one of the most requested songs on radio.
Sadhana got her second Filmfare nomination as Best Actress for the role of Meena in Yash Chopra's directorial saga Waqt (1965). She stood out in Bollywood’s first ever ensemble cast by bringing along the fashion of tight churidar-kurtas. The film proved to be 1965's "blockbuster hit". Her other notable works in the 1960s include performances in Rajkumar (1964), Dulha Dulhan (1964), Gaban (1966) and Budtameez (1966).
Sadhana had health issues due to her thyroid, which she got treated in Boston. After returning from the USA, she starred in the successful movies Intaquam (1969), Ek Phool Do Mali (1969), Aap Aye Bahaar Ayee (1971), Dil Daulat Duniya (1972), Geeta Mera Naam (1974).
In Intaquam she played the role of a woman who revengefully allures the son of her own boss who cheated her to be put behind the bars for a crime she did not commit. In 1974 her directorial venture Geeta Mera Naam released. Produced by her husband, the film had herself playing the lead actress along with Sunil Dutt and Feroz Khan. It was also Saroj Khan's first film as an independent dance director. A non-lexical vocable from the song "Mujhe Maar Daalo" of this film appears in the song "People" which features in American rapper J Dilla's album Donuts (2006).
After that, she retired from acting as she did not want to be cast as a side-actress or do character roles. Later, she and her husband formed a production company. She also produced a movie, Pati Parmeshwar, starring Dimple Kapadia in 1989.
Sadhana married her Love in Simla director Ram Krishna Nayyar on 7 March 1966. Their love blossomed on the film set. But as she was very young then, her parents opposed it. They were married for nearly thirty years, until his death in 1995 from asthma. The couple had no children.
She suffered from eye problems due to hyperthyroidism. After her retirement from acting, she refused to be photographed. Living in Santacruz, Mumbai, she rented an apartment building owned by singer Asha Bhosle.
Sadhana introduced the fringe hairstlye in Indian film industry in her first film Love in Simla. R.K. Nayyar, director of the film and her future husband, suggested the fringe style in order to make her forehead look narrower. Sadhana says, "They tried to stick a strip near the hair-line, but it didn’t work out." Nayyar then suggested she go for the fringe style as was then sported by the Hollywood actress Audrey Hepburn. The fringe soon became popular and a fashion fad in the 1960s.
The style was copied by girls in India and is still known by the same name. The look suited the role of naughty, pretty, glamorous Sonia that she played. But when Sadhana went on the shoot for Bimal Roy's Parakh, Roy was disappointed to see her modern look. She had to stick her fringe back in order to match the simple village girl she played here. In 1963, when she signed to play a role of simple Muslim girl from Aligarh in Mere Mehboob, Sadhana undid her famous "Sadhana cut" to fit the bill. She had centre-parted her hair and wore it in a plait; which was immediately discarded by the director H.S. Rawail. He said that the audience wanted to see her signature "Sadhana cut" and demanded it. Recently, the Bollywood actress Deepika Padukone sported the same fringe in her films Om Shanti Om (2007) and Chandni Chowk To China (2009).
Sadhana is also credited for bringing into fashion tight chudidar-kurta. She went with this concept of gracefully changing the traditional loose salwar kameez to her director Yash Chopra for 1965's film Waqt. Chopra felt insecure and thought that it would not be accepted. But Sadhana with the help of her fashion designer Bhanu Athaiya showed him a sample, which he liked. The trend lasted well in the 1970s and can be seen to be adopted by many actresses.
In a song sequence of "Phir Milenge Chalte Chalte" for Rab Ne Bana Di Jodi (2008), actress Bipasha Basu dressed herself in a white chudidar-kurta and also frolicked with the famous fringe as a tribute to Sadhana.
In 2014, Sadhana made a rare public appearance walking the ramp in a pink sari at a fashion show to support the cause for cancer and AIDS patients. She was escorted by her relative actor Ranbir Kapoor.
Despite the fact that many of Shivdasani's films fared very well at the box office, she did not receive any of the leading awards of the film industry. She was nominated for the Filmfare Award in Best Actress category for her roles in Woh Kaun Thi? and Waqt.
For her contribution to film, she was awarded the Lifetime Achievement Award by the IIFA in 2002.
During her later years, Sadhana was involved in court cases and suffering from illness. She had undergone an emergency surgery due to a bleeding oral lesion in December 2014 at the K J Somaiya Medical College.
Sadhana died on 25 December 2015 in Hinduja Hospital, Mumbai after being hospitalised with high fever. Although the illness she briefly suffered from was officially undisclosed, a family friend confirmed Sadhana had cancer.