Her father was a successful actor and director in Romania, directing many plays such as Much Ado About Nothing by William Shakespeare and Hernani by Victor Hugo.

Although the family had originally planned to emigrate to Canada, they settled in Freiburg im Breisgau, before eventually moving to West Berlin.

By sixteen she was playing lead roles in various television dramas;[clarification needed] since then she has appeared in films, including as Traudl Junge, Adolf Hitler's secretary, in the Academy Award-nominated 2004 film Downfall; following this Francis Ford Coppola wrote her a letter and gave her a leading role in Youth Without Youth (2007).

She appeared in The Reader and Der Baader Meinhof Komplex, which were both nominated for the 81st Academy Awards for best picture and best foreign language film respectively.

In 2018 Lara starred with her husband, Sam Riley, in Happy New Year, Colin Burstead by Ben Wheatley, playing his German girlfriend.