Nayanthara was born in Bangalore, Karnataka to Jacobite Christian Malayali parents, Kurian Kodiyattu and Omana Kurian. Her brother, Leno, who is nine years elder to her, lives in Dubai. As her father was an Indian Air Force official, she studied in various parts of India, mainly in North India. She did her schooling in Chennai, Jamnagar, Gujarat and Delhi. Following his retirement, they settled in Kerala, where she continued her college studies, at the Kendriya Vidyalaya schools in Kerala. In Tiruvalla, she studied at Balikamadom Girls Higher Secondary School and then attended Marthoma College for her bachelor's degree in English Literature.
Nayanthara was spotted, while she was still in college, by director Sathyan Anthikkad, who cast her opposite Jayaram in the 2003 Malayalam film Manassinakkare. Later, she co-starred alongside Mohanlal in Natturajavu and in Fazil's Vismayathumbathu. She was also cast with Mammootty in Thaskaraveeran and Raapakal.
Nayanthara subsequently started appearing in Tamil and Telugu films. In 2005, she was cast opposite Sarath Kumar in Hari's Ayya, debuting in the Tamil film industry, and followed it up with Chandramukhi. The comedy horror film, in which she starred alongside Rajinikanth, became one of the most successful Tamil films in history, running for over 800 days in theatres, eventually turning Nayanthara into one of the most-sought after actresses in Tamil. Later that year her third Tamil film, A. R. Murugadoss' Ghajini, in which she played a secondary female character, again was a commercially highly successful venture. However, she later disclosed that appearing Ghajini was a big mistake and the "worst decision" she ever took. She then made her debut in Telugu, starring in the film Lakshmi, following which she performed in Boss, alongside Venkatesh and Nagarjuna respectively. She regained her star billing in Kollywood acting opposite Ajith Kumar in the Vishnuvardhan-directed Billa. The gangster film, a remake of the same-titled 1980 Tamil film, went on to become a blockbuster success at the box office, while Nayanthara received many accolades for her performance as Sasha.
In 2008 Nayanthara had five releases, four of which were in Tamil. Her first release, the family entertainer Yaaradi Nee Mohini was one of the highest grossing Tamil films of the year, besides receiving seven nominations at the 56th Filmfare Awards South, including a Best Actress nomination for Nayanthara for her portrayal of Keerthi. Her subsequent releases, however, Kuselan opposite Rajnikanth, Sathyam opposite Vishal and Villu opposite Vijay, were all unsuccessful, while Aegan became an average grosser. Her only successful release in 2009 was Aadhavan with Surya which released in October 2009, and become one of the few successes of 2009.
In 2010, all her releases, which featured her in the lead female role turned out to be commercial successes. She delivered five super hit films in the four Southern languages – Bodyguard (Malayalam), Adurs and Simha (Telugu), Boss Engira Bhaskaran (Tamil) and Super (Kannada). She won the Asianet Film Awards Best Actress in a leading role for her performance in Bodyguard. The latter three, in particular, were exceptionally successful, with Simha becoming one of the highest-grossing Telugu films of the year and Boss Engira Bhaskaran releasing to highly positive reviews and becoming a blockbuster. Upendra's Super, which marked her debut into the Kannada film industry opened to rave reviews, while her performance was also praised by critics. Her performances in Simha, Boss Engira Bhaskaran and Super eventually fetched her nominations for the Filmfare Best Actress Award in the respective languages. She also starred in Shyamaprasad's critically acclaimed Malayalam film Elektra. Her performance was well appreciated by critics when it was screened at the International Film Festival of India. The film was also screened at the Dubai International Film Festival.
While shooting for her Tamil film Vallavan, she was romantically linked with the film's director and co-actor Silambarasan Rajendar, which she, however, denied. During the making and after the release of her film Villu, reports suggested that she was in a relationship with its director Prabhu Deva, with some sources even claiming that both had married secretly in June 2009. She had tattooed his name on her wrist, and began appearing with him in public, while keeping silence and refusing to comment about the issue, neither denying nor confirming the relationship. In September 2010 then, Prabhu Deva openly confessed his love for Nayanthara and further stated that he would marry her soon. The issue soon gained media attention and turned into a controversy, since Prabhu Deva was already married and not divorced yet, with his wife Ramalath, unwilling to agree for a divorce, filing a petition at the family court, seeking directions against her husband and Nayanthara from marrying, attending functions together and receiving awards as husband and wife and requesting a reunion with him. Furthermore, Ramalath threatened to go on hunger strike, if Prabhu Deva married Nayanthara, while several women's organizations also conducted protests against Nayanthara for "bringing disrepute to Tamil culture", burning an effigy of her.
On 7 August 2011, Nayanthara converted to Hinduism at the Arya Samaj Temple in Chennai. She went through Shuddhi Karma, a procedure involving a Vedic purification and a Homan where Nayan chanted the hymns from Veda and Gayathri mantra under the guidance of the priest. After the purification ceremony, a Certificate of Conversion to Hinduism was issued to her and her stage name, Nayanthara, became her official name.