Rai was born into a Tulu-speaking Bunt family in Mangalore. Her father, Krishnaraj, was an Army biologist, while her mother, Brinda, is a homemaker. She has one elder brother, Aditya Rai, who is an engineer in the merchant navy. Rai attended the Arya Vidya Mandir High School and did her intermediate schooling at Jai Hind College for a year, and then joined DG Ruparel College in Matunga, she trained in classical dance and music for five years. She gave up her education to pursue a career in modeling. She got married with eminent actor Abhishek Bachchan on 20 April 2007 and gave birth to a baby girl on 16 November 2011 named Aaradhya Bachchan.
In 1991, Rai won an international supermodel contest organized by Ford. In 1993, Rai gained huge public recognition for her appearance in a Pepsi commercial with actors Aamir Khan and Mahima Chaudhry. In the 1994 Miss India pageant, she won second place and was crowned Miss India World, also winning five other sub-titles, including "Miss Catwalk", "Miss Miraculous", "Miss Photogenic", "Miss Perfect Ten" and "Miss Popular".
Rai made her acting debut in 1997 with Mani Ratnam's Tamil film Iruvar, the film was a critical success In 1999, She starred in the romantic drama Hum Dil De Chuke Sanam which became a significant turning point in her career. She next took the leading role in Taal, was notable for being the first Indian film to feature in the top twenty listing at the American box-office. She appeared in Devdas, emerged as a major international success with revenues of over 530 million. In 2003, Rai featured in her brother's production debut Dil Ka Rishta which was co-written by her mother. She was later noted for her starring role in Rituparno Ghosh's independent Bengali film Chokher Bali, the film was commercially a sleeper hit. The film was declared a blockbuster, and became the highest grossing Indian film of 2006 with gross revenues of over 1.11 billion. Rai garnered both critical and box-office success, Jodhaa Akbar, gross earnings of 1.12 billion. In 2010, Rai’s bilingual film Raavanan, which was success in Tamil and failure in Hindi. Rai's next role in Enthiran, emerged as one of the highest-grossing Indian films of all time. Her upcoming movies are Randamoozham, Sarabjit and Ae Dil Hai Mushkil.
Rai made her first commercial for Camlin pencils when she was in the 9th grade. She became popular after appearing in a Pepsi commercial. She is the only actress who endorsed both Pepsi and Coca-Cola. She is one of the top brand ambassadors in the country. She modelled for Titan Watches, Longines watches, L'Oréal, Coca-Cola, Lakmé Cosmetics, Casio pager, Philips, Palmolive, Lux, Fuji films, Nakshatra Diamond Jewellery, and Kalyan Jewellers. She was named the official brand ambassador for De Beers diamonds in India. Rai has been ranked the 2nd most popular watch brand ambassador worldwide in a survey, conducted by World Watch Report. In 2013 Rai and her husband Abhishek Bachchan have been roped in as the brand ambassadors by the TTK Group. Aishwarya Rai, endorse Lodha’s Worli project by Lodha Group World One.
Rai is the brand ambassador for The Eye Bank Association of India's nationwide campaign to promote eye donation and also for Pulse Polio, a campaign established by the Government of India in 1994 to eradicate polio in India. Along with other members of the Bachchan family, she laid the foundation of a special school for underprivileged girls in Daulatpur village in Uttar Pradesh in 2008. Aishwarya Rai is a UN Microcredit Spokesperson. She supports PETA India.