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Bhatt was born on 15 March 1993 in Mumbai to Indian film director Mahesh Bhatt and actress Soni Razdan. Her father is of Gujarati descent and her mother is of Kashmiri and German ancestry. Director Nanabhai Bhatt is her paternal grandfather. She has an elder sister, Shaheen (born 1988) and two half-siblings, Pooja Bhatt and Rahul Bhatt.

Bhatt has performed playback singing for the song "Sooha Saaha" in Highway (2014). A. R. Rahman, the composer of the film, invited her to his music school to undergo training. In 2014, she sang the unplugged version of the song "Samjhawan", for the composers Sharib-Toshi, in Humpty Sharma Ki Dulhania. In 2016, she sang an alternate version of the song "Ikk Kudi", for the soundtrack of Udta Punjab, with her co-star Dosanjh.  In addition to acting in films, Bhatt has performed at the Filmfare, Screen and Stardust award ceremonies, and has also participated in a stage show in Hong Kong alongside Varun Dhawan and Sidharth Malhotra. In 2013, she performed at a charity event with Dhawan, Malhotra, Aditya Roy Kapur, Shraddha Kapoor and Huma Qureshi to raise funds for the flood-affected victims of Uttarakhand. In August 2016, she performed in various cities of the United States as a part of the "Dream Team 2016" tour, alongside actors Dhawan, Malhotra, Kapur, Katrina Kaif, Parineeti Chopra, filmmaker Karan Johar, and singer Badshah.  In 2013, Bhatt took part in a campaign for PETA to raise awareness about homeless animals. In 2017, Bhatt launched an ecological initiative named CoExist to raise awareness about the welfare of street animals. The following year, she collaborated with Facebook Live for a campaign named Find Your Green, to campaign for environmentalism.  In 2014, Bhatt launched her own line of clothing for women in association with the online fashion portal Jabong.com; she described the collection to be "very simple" and "very me". She is also the celebrity endorser for a number of brands and products, including Coca-Cola, Garnier and Maybelline.
Alia Bhatt