Ranaut's father is a businessman and her mother is a school teacher. Ranaut has a younger sister named Rangoli who survived an acid attack in late 2006. She is said to be dating an unknown man whom she met in South Africa.
Kangana moved to Mumbai to try her luck in movies. She was unsuccessful for quite a while, until she received the offer for Gangster. The film was critically and commercially successful, her performance was especially applauded. This was followed by another acclaimed performance in Woh Lamhe (2006). Kangana was announced heroine of Jeeva's forthcoming Tamil venture, Dhaam Dhoom on February 19, 2007.