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Describing her childhood, Bhatt has said, "I had a rather grounded and modest upbringing. I didn’t get the pleasures that people assume I would’ve got because I am Mahesh Bhatt’s daughter." Growing up, she did not share a close bond with her father; Razdan has said that she raised her children mostly as a single parent as her husband did not take much interest in their lives. Bhatt aspired to be an actress from a young age, and has said that she first realised it while rehearsing for the school choir in kindergarten. She soon began dance lessons at Shiamak Davar's institute. Her first acting role was at age five in her father's production venture Sangharsh (1999), in which she briefly played the younger version of Preity Zinta's character. Talking about her experience, Bhatt later said, "I don’t remember much of the shoot. I would go to the sets only for the food".

In 2019, Bhatt launched her own production company named Eternal Sunshine Productions. She starred opposite Ranveer Singh in Zoya Akhtar's Gully Boy, a musical inspired by the life of the street rappers Divine and Naezy. She attended acting workshops to learn a ghetto dialect to enable her to improvise on set. The film premiered at the 69th Berlin International Film Festival. Writing for Screen International, Lee Marshall opined that "it's Bhatt’s sharp performance that carries most successfully the mix of wry humour, romance and social comment that Gully Boy essays". With global earnings of over ₹ 2.37 billion (US$33 million), the film emerged as Bhatt's highest-grossing release. Gully Boy won a record 13 Filmfare Awards, and Bhatt was awarded with her career's third Best Actress trophy. The ensemble period drama Kalank marked Bhatt's biggest-budget film to that point. Set in the 1940s prior to the partition of India, it featured Dhawan and her as star-crossed lovers. She watched the films Mughal-e-Azam (1960) and Umrao Jaan (1981) to learn the body language of women from the era; to better her Urdu-speaking skills, she watched the Pakistani television series Zindagi Gulzar Hai. Shubhra Gupta bemoaned that she was "watchable, if increasingly, exasperatingly familiar". The film did not perform well at the box office.

Bhatt is also the celebrity endorser for a number of brands and products, including Coca-Cola, Garnier and Maybelline. Duff & Phelps estimated her brand value to be US$36.5 million, in 2018, the eighth highest of Indian celebrities.

In 2017, Bhatt was featured by Forbes Asia in their 30 Under 30 list. She has appeared in Forbes India's Celebrity 100 list since 2014, peaking at the eighth position in 2019. That year, the magazine estimated her annual income to be ₹ 592.1 million (US$8.3 million) and listed her as the highest-paid actress in the country. In 2018 and 2019, the Indian edition of GQ featured her among the nation's 50 most influential young people and credited her for "striking a balance between big-budget, all-star blowouts and more script-oriented films". Bhatt was listed in first place in The Times of India' s "50 Most Desirable Women" list of 2018.

Bhatt took on the part of a poor Bihari migrant in Udta Punjab (2016), a crime drama about substance abuse from the director Abhishek Chaubey. The intense role marked a departure from the mostly light-hearted parts she had played, and in preparation, she watched documentaries on drug abuse and learned to speak a Bihari dialect. The film generated controversy when the Central Board of Film Certification deemed that it represented Punjab in a negative light and demanded extensive censorship before its release. The Bombay High Court later cleared the film for exhibition with one scene cut. Bhatt's performance was critically acclaimed. Raja Sen of Rediff.com wrote that she "commits to her accent and deals with the film's most unsavoury section, and is stunning during an incendiary speech that elevates the entire film to a whole other level." Bhatt next played a troubled young woman who consults with a therapist (played by Shah Rukh Khan) in the coming-of-age film Dear Zindagi (2016). Writing for IndieWire, Anisha Jhaveri commended her for providing millennial angst with "a three-dimensionality". Udta Punjab and Dear Zindagi gained Bhatt awards attention; for the former, she won the Screen Award and the Filmfare Award for Best Actress, and for the latter, she received an additional Best Actress nomination at Filmfare.

Bhatt collaborated with Bahl once again in the romantic comedy Shaandaar. Released in 2015, the film featured Shahid Kapoor and Bhatt as insomniacs who fall in love during a destination wedding. Kunal Guha of Mumbai Mirror criticised the film and wrote that Bhatt "socks life into her character but fails to pump any into this film". Shaandaar did not perform well commercially. She began 2016 with a supporting role in the ensemble drama Kapoor & Sons, which was a critical and commercial success.

In addition to acting in films, Bhatt has launched her own line of clothing and handbags and is the founder of the ecological initiative CoExist. She has sung six of her film songs, including the single "Samjhawan Unplugged" in 2014, and she participates in stage shows and concert tours.

Dismayed by the critical response to Student of the Year, Bhatt was keen to play a better role. She found it in Imtiaz Ali's road film Highway (2014), in which she starred as a lonely teenage girl who develops stockholm syndrome after being abducted. She took diction lessons to improve her Hindi, and was challenged by the emotional and physical requirements of the part. Ali shot the film sequentially and several scenes were improvised on set based on Bhatt's reactions. She has said that several aspects of her character's journey mirrored her own, as it was the first time she experienced situations that were different from her own privileged upbringing. Ronnie Scheib of Variety took note of her "endearingly cockeyed perf" and commended her for "bringing an underlying sadness and wistful intelligence" to her part. The film underperformed at the box office; Bhatt won the Filmfare Critics Award for Best Actress and also gained a Best Actress nomination at the ceremony. She also appeared in Vikas Bahl's short film on women's safety, entitled Going Home.

Continuing her collaboration with Johar's production company, Dharma Productions, Bhatt starred in the romantic films 2 States and Humpty Sharma Ki Dulhania (both 2014). The former was an adaptation of Chetan Bhagat's novel of the same name, and is about two management students who have trouble convincing their parents of their relationship. For her role as a headstrong Tamil girl, she learnt to speak her lines in the language with help form a tutor. Shubhra Gupta of The Indian Express was appreciate of Bhatt, labelling her a "surprise" and "easy and fresh and natural". She played a Punjabi girl who has an affair before her wedding in Shashank Khaitan's Humpty Sharma Ki Dulhania. Co-starring Varun Dhawan, the film was described as a tribute to Dilwale Dulhania Le Jayenge (1995) by Johar. Writing for India Today, Rohit Khilnani thought that Bhatt had pitched in "one of her best performances so far", though Nandini Ramnath of Mint found her lacking in subtlety, writing that she was "more comfortable acting out her feelings through dialogue and actions". Both films were commercially successful, each earning over ₹ 1 billion (US$14 million) worldwide. Her accomplishments in 2014 established her in Bollywood.

The series of successful films continued with Bhatt's next project—the romantic comedy Badrinath Ki Dulhania (2017)—which reunited her with Khaitan and Dhawan. It tells the story of an independent young woman (Bhatt) who refuses to conform to patriarchal expectations from her chauvinistic fiancée (Dhawan). Rachel Saltz of The New York Times took note of the film's statement on gender equality and wrote, "Without ever falling into the clichés of spunky Bollywood heroine, [Bhatt] effortlessly embodies that admirable thing: a modern woman." She received another Filmfare nomination for Best Actress. Meghna Gulzar's espionage thriller Raazi (2018), starred Bhatt as Sehmat, a Kashmiri spy married to a Pakistani army officer. Set during the Indo-Pakistani War of 1971, the film is an adaptation of Harinder Sikka's novel Calling Sehmat. Anna M. M. Vetticad of Firstpost found Bhatt to be "stupendous" in the role, adding that "the young star once again displaying the maturity and confidence of a veteran on camera". Raazi proved to be one of the highest-grossing female-led Hindi films, and its success led Box Office India to credit Bhatt as the most successful contemporary actress of Hindi cinema. She won another Best Actress award at Filmfare.

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.

Bhatt has performed on stage 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 America for the "Dream Team 2016" tour, alongside Johar, the actors Dhawan, Malhotra, Roy Kapur, Katrina Kaif, Parineeti Chopra, and the singer Badshah.

In 2013, Bhatt took part in a campaign for PETA to raise awareness on homeless animals. In 2017, she 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. Bhatt designed her own clothing brand for women in 2014 for the online fashion portal Jabong.com and in 2018, she launched her own line of handbags for VIP Industries.

Bhatt had her first leading role in 2012 with Karan Johar's teen film Student of the Year, alongside Sidharth Malhotra and Varun Dhawan. She auditioned alongside 500 girls and was cast after losing 16 kgs. She played a sophisticated teenage girl involved in a love triangle. Anupama Chopra of Hindustan Times mentioned similarities between her character and the one played by Kareena Kapoor in Johar's Kabhi Khushi Kabhie Gham... (2001), but noted that her performance was "without the killer attitude". Lisa Tsering of The Hollywood Reporter dismissed her as "a washout. Not only is she inelegant in the dance numbers, but her expressions are limited; and the digital retouching of her face throughout the film is a distraction". Student of the Year grossed ₹ 960 million (US$13 million) at the box office.

Born into the Bhatt family, she is the daughter of filmmaker Mahesh Bhatt and actress Soni Razdan. After making her acting debut as a child in the 1999 thriller Sangharsh, Bhatt played her first leading role in Karan Johar's teen drama Student of the Year (2012). She went on to establish herself with starring roles in several films produced by Johar's studio Dharma Productions, including the romances 2 States (2014), Humpty Sharma Ki Dulhania (2014), and Badrinath Ki Dulhania (2017); and the coming-of-age drama Dear Zindagi (2016). Bhatt won the Filmfare Critics Award for Best Actress for playing a kidnapping victim in the road drama Highway (2014), and three Best Actress awards at the ceremony for playing a Bihari migrant in the crime drama Udta Punjab (2016), a spy in the thriller Raazi (2018), and the volatile girlfriend of an aspiring rapper in the musical drama Gully Boy (2019).

Alia Bhatt (/ˈ ɑː l iː ɑː ˈ b ə t / ; born 15 March 1993) is an actress and singer of Indian origin and British citizenship, who works in Hindi films. The highest-paid actress in India, as of 2019, her accolades include four Filmfare Awards. She has appeared in Forbes India's Celebrity 100 list since 2014 and was featured by Forbes Asia in their 30 Under 30 list of 2017.

Alia Bhatt was born on 15 March 1993 in Bombay (present-day Mumbai) into the Bhatt family to Indian film director Mahesh Bhatt and actress Soni Razdan. Her father is of Gujarati descent and her mother is of Kashmiri Pandit and German ancestry. She holds British citizenship. She has an elder sister, Shaheen, and two half-siblings, Pooja and Rahul Bhatt. Actor Emraan Hashmi and director Mohit Suri are her paternal cousins, while producer Mukesh Bhatt is her uncle. Bhatt was educated at the Jamnabai Narsee School.

Bhatt will next team with Aditya Roy Kapur, Sanjay Dutt, and Pooja Bhatt for Sadak 2, a sequel to her father's crime film Sadak (1991) and will star alongside Ranbir Kapoor in Ayan Mukerji's fantasy film trilogy, the first of which is named Brahmāstra. She will then appear alongside N. T. Rama Rao Jr and Ram Charan in the Telugu-language period film RRR, and will portray the titular gangster and madam of a Kamathipura brothel in Gangubai Kathiawadi, a biopic directed by Sanjay Leela Bhansali. Bhatt has also committed to feature alongside an ensemble cast in Takht, a historical drama directed by Johar.