She grew up in Bengaluru, Karnataka and studied Journalism from Manipal Institute of Communication. She quotes that she never wished to become an actress but a journalist as she was "an idealist", but felt journalism was "not what it used to be". She then decided to become a filmmaker as she could express her ideas "better through films", and enrolled for a course in cinematography at the FTI Pune. During the entrance examination, she met Nandini Reddy, who "brainwashed" and convinced her to take up acting.Nandini Reddy would later turn director and sign Nithya for the lead female role in her first project.
She, however, appeared first on screen as a child artiste when she was eight in the Indian English language film, Hanuman (1998), playing the younger sister to Tabu's character.The 2008 off-beat film Aakasha Gopuram, directed by National Film Award-winning director K. P. Kumaran, marked her debut in a leading role, in which she was red with Mohanlal. She was in the midst of her 12th class exams when she was offered the role, after Mohanlal had spotted her on the front cover of a tourism magazine. Her performance was well received, with critics writing that she shows "sparkle in her debut venture" and "makes her entry in an impressive role", though the film, based on the Norwegian play The Master Builder, got mixed reviews and was a financial failure. She next made her Kannada debut with the film Josh. She essayed a supporting role in the film, which received race reviews, and became a commercial success as well, with her performance garnering her a nomination in the Best Supporting Actress category at the 57th Filmfare Awards South.
In 2011, her first release was Nandini Reddy's romantic comedy Ala Modalaindi, which was Nithya's maiden Telugu venture as well.The film opened to favorable reviews by critics and turned out to become a sleeper hit, while Nithya received critical praise for her performance. Idlebrain's Jeevi in his review cited that she "epitomized Nitya character with her fabulous performance", "looks beautiful in all kinds of dresses" and was "the best debut in recent years of Telugu cinema after Samantha in YMC", while another critic wrote that she was a "charming find" and "...quite the Genelia replacement that our cinema so badly needs right now."Further more, she also sang two songs for the soundtrack album of the film, tuned by Kalyani Malik.Nandini Reddy, later in a review, went on to describe Nithya as "the discovery of the decade". Following Ala Modalaindi, she starred in Santosh Sivan's historical fiction Urumi as part of an ensemble cast. She portrayed a Chirakkal princess named Bala, playing the love interest of Prabhu Deva's character,which gained positive remarks, with a Sify review claiming that she "looks pretty and is a scene stealer".Nithya quoted that much of her character was based on "Santosh's perception of who I am", with Sivan stating that he had written that role for her and that only she could play it.
