Agnihotri had her first modelling stint at age 10. She attended Good Shepherd's Convent School and acted in a school play. Rati starred in her first film, Puthiya Vaarpugal in 1979, directed by Bharathiraja. The film became a blockbuster, with Rati an overnight sensation. Bharathiraja soon directed her in her second film, Niram Maaratha Pookkal in 1979. She also starred in Telugu and Kannada films and made 32 films in just three years. She worked with big banners and top stars in South Indian cinema. She had worked with director K. Balachander once before and had been Kamal Hassan's leading lady in many South Indian films. They approached her for the Hindi remake of their Telugu blockbuster Maro Charithra. It became one of the top grossing hits of 1981 and marked the debut into Hindi films of five stars of the South Indian film industry: director K. Balachander, hero Kamal Hassan, heroine Rati Agnihotri, singer S. P. Balasubrahmanyam and supporting actress Madhavi. She then starred in over 43 Hindi films. Her biggest hits were Farz Aur Kanoon, Coolie, Tawaif and Hukumat. Rati's marriage to businessman and architect Anil Virwani on 9 February 1985 and convinced her to leave Hindi films when she was at the top. In 1987, she gave birth to her only child, Tanuj Virwani. In 2015, she separated from Virwani after thirty years of marriage. After 16 years, she made her comeback. She acted in Kuch Khatti Kuch Meethi. More film offers came in, and she took them, such as Yaadein and Dev. After a 20-year absence from South Indian films, she returned in the Tamil film Majunu. She made her Malayalam debut in Anyar, English debut in An Ode to Lost Love and Bengali debut in Aaina-te. Besides acting, she devotes time to social causes like cancer and AIDS. She has acted in ten languages, including, but not limited to Hindi, Tamil, Telugu, Malayalam, Kannada, Bengali, Bhojpuri, Punjabi and English.