Mukerji was born in Mumbai on 21 March 1978 to 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. Her brother, Raja Mukherjee, is a film producer turned director. Her maternal aunt, Debashree Roy, is a Bengali film actress and her cousin, Kajol, is a popular Bollywood actress. Another cousin of hers, Ayan Mukerji is the writer and director of Wake Up Sid (2009). As part of a tradition, the Mukherjee family celebrates the festival of Durga Puja at Santacruz every year. Mukerji, being a religious person, takes part in the festivities with her entire family.
Mukerji is a trained Odissi dancer and began learning the dance in the tenth grade. She was schooled at Maneckji Cooper High School in Juhu, and graduated from SNDT Women's University in the field of Home Science. Despite her family background, Mukerji was never interested in becoming an actress. In 1994, director Salim Khan approached her to be a part of his directorial, Aa Gale Lag Jaa. Her father was against her working in films and hence, she turned down the offer.However, she finally decided to take up acting on an experimental basis, on the insistence of her mother.