Born in Mumbai, Maharashtra into the Kapoor film family of Punjabi
Khatri origin, Kapoor is the youngest daughter of actors Randhir Kapoor
and Babita (née Shivdasani). She is the granddaughter of actor and
filmmaker Raj Kapoor, great-granddaughter of actor Prithviraj Kapoor,
sister of actress Karisma Kapoor and niece of actor Rishi Kapoor.
According to Kapoor, the name "Kareena" was derived from the book Anna
Karenina, which her mother read while she was pregnant with her. She is
also often informally referred to as Bebo.

As children, the Kapoor sisters dreamed of becoming actresses. Kapoor
was particularly inspired by actresses Nargis and Meena Kumari. However,
despite her family background, her father disapproved of women acting
because he believed it to be incompatible with their duty to the family.
This led to conflict between her parents, and Kapoor's mother
ultimately left her father. Kapoor was raised in Lokhandwala by her
mother who worked several jobs to support her daughters until Karisma
debuted as an actress in 1991.