[2] Her father, Amrit Lal Nair, was an officer of the Indian Administrative Service, and her mother, Parveen Nayyar, was a social worker.

While she studied at Harvard University, Nair became involved in the theater program and won a Boylston Prize for her performance of Jocasta's speech from Seneca's Oedipus.

[5] In 1982, she made her second documentary titled So Far from India, which is a 52-minute film that followed an Indian newspaper dealer living in the subways of New York, while his pregnant wife waited for him to return home.

[5] Her third documentary, India Cabaret, released in 1984, revealed the exploitation of female strippers in Bombay, and followed a customer who regularly visited a local strip club while his wife stayed at home.

Its featured segments included a group of workers in an electrical products factory in Mumbai who took time off to laugh during their coffee break.

[3] The film centers on a carpet-cleaner business owner (Denzel Washington) who falls in love with the daughter (Sarita Choudhury) of one of his Indian clients.

[10] Nair then directed the Golden Globe-winning Hysterical Blindness (2002), followed by making William Makepeace Thackeray's epic Vanity Fair (2004).

[3] Based on the book by Pulitzer Prize-winner Jhumpa Lahiri, Sooni Taraporevala's screenplay follows the son of Indian immigrants who wants to fit in with New York City society, but struggles to get away from his family's traditional ways.

"[20] Nair's 2016 film Queen of Katwe, a Walt Disney Pictures production, starred Lupita Nyong'o and David Oyelowo and was based on the story of Ugandan chess prodigy Phiona Mutesi.

(2008), Migration (2008), New York, I Love You (2009) and her collaboration with, among others, Emir Kusturica and Guillermo Arriaga on the compilation feature Words with Gods.

[24] A longtime activist, Nair set up an annual film-makers' laboratory, Maisha Film Lab in Kampala, Uganda.

[25] Maisha as of 2018 was building a school with Architect Raul Pantaleo, winner of Aga Khan Award for Architecture, and his company Studio Tamassociati.

[27] A musical adaptation of Monsoon Wedding, directed by Nair, premiered at the Berkeley Repertory Theatre, running from 5 May to 16 July 2017.

The university had a collaboration with Nair's Maisha Film Lab, and offered opportunities for international students to work together and share their interests in film-making.

[30] In July 2020, journalist Ellen Barry announced that her Pulitzer Prize-nominated story "The Jungle Prince of Delhi" about the "royal family of Oudh", published in The New York Times, would be adapted into a web series for Amazon Studios by Nair.

In 1988 Nair met her second husband, Indo-Ugandan political scientist Mahmood Mamdani, while in Uganda doing research for the film Mississippi Masala.

[35] In July 2013, Nair declined an invitation to the Haifa International Film Festival as a "guest of honor" to protest Israel's policies toward Palestine.

Nair was subsequently praised by PACBI, which stated that her decision to boycott Israel "helps to highlight the struggle against colonialism and apartheid."