Gauhar Khan was born on August 23, 1983 in a Muslim family in Pune, Maharashtra. She completed her schooling from Mount Carmel Convent School, Pune. Khan is one of five siblings in her family. She is the youngest of five siblings and the sister of actress Nigaar Khan.
She made her acting debut in the 2009 Yash Raj Films production Rocket Singh: Salesman of the Year. Anupama Chopra said, "Gauhar was fashionable, ambitious and smart receptionist, she was sharply etched and memorable as Koena in the film". Namrata Joshi from Outlook India stated that "Leading the pack is Gauhar Khan as the feisty office secretary. Gauhar is the colorful character in the film who played too nice."
Khan next appeared as outspoken and rebellious Samara Shroff in the action thriller Game (2011). NDTV said that "Gauhar as the loyal secretary Samara is nicely outfitted."
Khan played Chand Bibi in the 2012 romantic drama Ishaqzaade, in which she also did two item numbers "Jhalla Walla" and "Chokra Jawaan". Shomini Sen of Zee News stated that, "Gauhar as a kind-hearted prostitute Chand sizzles in two songs. It is pity that she is used so less in the film." Mrigank Dhaniwala from Koimoi stated, "Gauhar, who plays courtesan Chand, does very well."Taran Adarsh said, "Gauhar is lovely in a special role. Also, she dances very well in the two tracks."
On 30 November 2014, Khan was slapped during the shooting of a singing reality show called India's Raw Star by a member of the audience who admonished her for wearing a short dress. Police arrested 24-year-old Akil Malik for attacking the actress at show's studio in Mumbai. They quoted the man as telling Khan that "being a Muslim woman, she should not have worn such a short dress". He was later produced in court on 1 December 2014.
Khan was engaged to director Sajid Khan in 2003, but the relationship didn't last long. Khan was then in a relationship with actor and fellow contestant of Bigg Boss, Kushal Tandon in 2013, but later they split. Sources conflict about her birth year, listing the year as 1983 or 1980.