Kaif was born in Hong Kong to an Indian Kashmiri father, Mohammed Kaif, and an English mother, Suzanne Turquotte, both of whom are British citizens. Her parents divorced when she was very young. Kaif has seven siblings. She was raised in Hawaii and later moved to her mother's home country, England.
Kaif began her modeling career at the age fourteen; her first job was for a jewelry campaign. She continued modeling in London under a contract with the Models 1 Agency and did campaigns for houses such as La Senza and Arcadius, and even walked on the London Fashion Week.
Kaif's London modeling-work led to her discovery by London-based filmmaker Kaizad Gustad, who gave her a part in his film Boom (2003). She moved to Mumbai and was offered a number of modeling assignments. However, filmmakers were initially hesitant to sign her because she could not speak Hindi.
Kaif saw moderate success with the 2005 film Sarkar, where she played the bit part of Abhishek Bachchan's girlfriend, and Maine Pyaar Kyun Kiya (2005), where she was paired opposite Salman Khan.
In 2007, Kaif appeared in her first major hit movie, Namastey London, wherein she starred as a British Indian girl alongside Akshay Kumar for the second time after the box office letdown Humko Deewana Kar Gaye (2006). Her run of hit films continued with Apne, Partner, and Welcome.
In 2008, she played the villain role for the first time in Abbas-Mustan's hit action thriller Race. She played the role of Saif Ali Khan's secretary who is secretly in love with his hostile stepbrother (played by Akshay Khanna). Kaif's second release of the year was Anees Bazmee's production Singh Is Kinng, opposite Akshay Kumar. The film was a big success at the box office. Kaif's final release of the year, Subhash Ghai's Yuvvraaj, was a commercial failure, but its script has made its way into the Library of the Academy of Motion Picture Arts & Sciences for artistic merits, original screenplay with a substance, and the film as a whole.
Kaif's first release for 2009, New York, with John Abraham, was a critical and commercial success. Kaif's performance was highly regarded. Wrote critic Taran Adarsh, "Katrina gives you the biggest surprise. Known for her glamour roles, Katrina proves that she can deliver if the director and writer offer her a role of substance. She's outstanding. In fact, people will see a new, different Katrina this time."
She next played a bit role as a biker chick in the multi-starrer action film Blue, popularly known as India's first underwater thriller, which performed decently at the box office. The film was not successful.
At the year's end, she appeared in Ajab Prem Ki Ghazab Kahani, with Ranbir Kapoor, and De Dana Dan with Akshay Kumar. Both films were commercial successes.
Kaif's first film of 2010 was Raajneeti, where she appeared opposite Ranbir Kapoor. The film did extremely well at the box office, receiving a blockbuster status. She is currently filming Farah Khan's Tees Maar Khan with Akshay Kumar. The film is set to be released on 24 December 2010. Her popularity led her to be named as one of Bollywood's six top actresses in a September 2010 article, alongside actresses Kareena Kapoor, Priyanka Chopra, Aishwarya Rai, Deepika Padukone and Kangna Ranau
* 2005: Zee Cine Award for Most Promising Debut, Sarkar
* 2008: IIFA Award for Best Actress, Race
* 2009: Apsara Award for Best Actress In Supporting Role, Race
* 2009: IIFA Award for Best Actress, Singh Is Kinng
* 2009: Stardust Award for Star Of The Year, Singh Is Kinng
* 2009: Stardust Award for Best Actress In A Negative Role, Race
* 2010: Screen Award for Best Actor In Popular Category, New York
* 2010: Stardust Star of the Year Award – Female for New York & Ajab Prem Ki Ghazab Kahani 
* 2010: Filmfare Best Actress Award for New York
* 2006: Stardust Breakthrough Performance Award (Female), Maine Pyaar Kyun Kiya
* 2006: Idea Zee F Awards, Fashion Diva of the Year 
* 2008: Zee Cine Awards, British Indian Actor Award
* 2008: IIFA Awards, Style Diva of the Year
* 2008: Sabsey Favourite Kaun Awards, Sabsey Favourite Heroine, Singh Is Kinng
* 2008: Apsara Film Producers Guild of India Awards, Style Diva of the Year
* 2009: Rajiv Gandhi Award
* 2009: Golden Kela Awards, Dara Singh Award for the Worst Accent
* 2009: Sabsey Favourite Kaun Awards, Sabsey Favourite Heroine 
* 2009: ASSOCHAM Award, Performing Excellence 
* 2010: Star Screen Awards, Entertainer of the year 
* 2010: Stardust Awards, Best Actress - Popular Award for New York & Ajab Prem Ki Ghazab Kahani
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