Rani comes from a film-oriented family of Bengali origin. Her father Ram Mukherjee is a retired director and one of the founders of Filmalaya Studios while her mother Krishna was a playback singer.
She is a trained Odissi dancer, and began learning the dance in the tenth grade. Mukerji studied at Maneckji Cooper High School in Juhu, and later enrolled at Mithibai College in Mumbai.
After doing a short cameo appearance for the first time in her father`s Bengali film ‘Biyer Phool’ (1992), Mukerji made her acting debut four years later, as the protagonist of ‘Raja Ki Aayegi Baraat’ (1996). Her performance as a rape victim in the film was well received, but when the film failed at the box office, she returned to college to complete her education. Mukerji returned to films in 1998.
Rani got her first commercial success in ‘Ghulam’, opposite Aamir Khan. Karan Johar`s directorial debut, ‘Kuch Kuch Hota Hai’, co-starring Shahrukh Khan and Kajol, added to Rani’s fame as the movie was a blockbuster, and she received her first Filmfare Award in the Best Supporting Actress category.
After two successive hits behind her, Rani was not only noticed but appreciated as well. She also starred in Shaad Ali`s critically acclaimed ‘Saathiya’. The film became one of the highest grossing movies of the year.
She marked her entry into the biggest production house of bollywood, Yash Raj Films; with Kunal Kohli’s ‘Mujhse Dosti Karoge’ (2002). She got critical acclaim as well as audience recognition in ‘Yuva’, ‘Hum Tum’, Sanjay Leela Bhansali`s ‘Black’, Shaad Ali`s ‘Bunty Aur Babli’, Amol Palekar`s ‘Paheli’ and Ketan Mehta`s ‘The Rising’ and Karan Johar’s ‘Kabhi Alvida Naa Kehna’ (KANK).
In 2005, Rani was a guest of honour at a state dinner to greet General Pervez Musharraf in company of the Indian Prime Minister Manmohan Singh. She was the only Bollywood actress on the elite guest list.
She appeared along with various other Bollywood actors at the Closing Ceremony of the 2006 Commonwealth Games in Melbourne, as part of a performance displaying Indian culture, on behalf of the 2010 Commonwealth Games. For her three minutes dance act it was reported that she had been paid 1.5 million rupees.