Kaushal was born on 16 May 1988 in a chawl in suburban Mumbai to Sham Kaushal, a stuntman and subsequent action director in Hindi films. His younger brother, Sunny, is also an actor. His family is Punjabi. Kaushal has described himself as a “regular kid who was interested in studying, playing cricket and watching movies”. His father was keen on his son having a stable career and thus, Kaushal pursued an engineering degree in electronics and telecommunications from Mumbai’s Rajiv Gandhi Institute of Technology. During an industrial visit to an IT company, he realised that an office job would be unsuitable for him and began aspiring to have a career in film. He briefly took on an engineering job and began accompanying his father to film sets. He studied acting at Kishore Namit Kapoor’s academy and worked as an assistant director to Anurag Kashyap in the two-part crime drama Gangs of Wasseypur (2012). Kaushal has described fond memories of working with Kashyap, whom he considers as his mentor. He also began working on stage with his first acting job in Manav Kaul’s production of Laal Pencil. In film, Kaushal played minor roles in Kashyap’s productions Luv Shuv Tey Chicken Khurana (2012) and Bombay Velvet (2015), and the experimental short film Geek Out (2013).

The 2015 Busan International Film Festival marked the release of the drama Zubaan, which Kaushal had filmed before Masaan. His role was that of a grieving man who starts stammering after the death of his father. He worked with a speech therapist to learn stammering patterns and spent time with some of the doctor’s patients. After completing work on the film, Kaushal found it difficult to distance from the character and began to stammer in real life. His performance led Justin Chang of Variety to label him as a “charismatic, naturally engaging talent”. In Kashyap’s psychological thriller Raman Raghav 2.0 (2016), Kaushal played a drug-addicted police officer in pursuit of the serial killer Raman Raghav (portrayed by Nawazuddin Siddiqui). The troubled and unbalanced character had little in common with Kaushal’s own personality, and to convince Kashyap to cast him, he lived in isolation for five days and kept repeating lines from the script. Writing for Rediff.com, Aseem Chhabra found his performance “brave” and added, “If there is one big surprise in Raman Raghav 2.0, it is Vicky Kaushal’s star-making performance.” Both Zubaan and Raman Raghav 2.0 failed to find a wide audience at the box office.

Kaushal achieved his breakthrough in 2018. He was first seen as the male lead of the romantic comedy Love per Square Foot, India’s first Netflix original film. Shweta Ramakrishnan of Firstpost considered the chemistry between Kaushal and his co-star Angira Dhar to be the film’s highlight. He next featured in Meghna Gulzar’s spy thriller Raazi (2018), based on Harinder Sikka’s novel Calling Sehmat. Set during the Indo-Pakistani War of 1971, the film tells the real-life story of a young Indian girl from Kashmir (played by Alia Bhatt) who marries a Pakistani army officer (Kaushal) to spy for Indian intelligence. He was drawn to the humanity he found in the story and worked towards conveying both vulnerability and authoritative strength in his character. The film emerged as one of the highest-grossing Hindi films featuring a female protagonist and Meena Iyer of Daily News and Analysis commended Kaushal for being “the correct foil” to Bhatt’s character. His second Netflix production of the year was the anthology film Lust Stories. It consists of four short films dealing with female sexuality; Kaushal was seen in Karan Johar’s segment as a newly married man who fails to recognise his wife’s (played by Kiara Advani) sexual dissatisfaction.

In 2019, Kaushal starred as a military officer in Uri: The Surgical Strike, an action film based on the 2016 Uri attack, directed by Aditya Dhar and filmed in Serbia. To prepare, he gained muscle weight, practised a ketogenic diet, and underwent five months of military training and mixed martial arts sessions. He injured his arm while filming an action sequence in it. Uday Bhatia of Mint found Kaushal to be a “fetching stoic lead” but bemoaned the lack of depth in his character. Rajeev Masand took note of the film’s jingoism and criticised the over-the-top characterisations, but opined that Kaushal “brings both the bulked-up physicality and the sort of steely determination that the part requires”. Uri earned ₹2.4 billion (US$34 million) in India, and over ₹3.5 billion (US$49 million) worldwide, making it the tenth highest-grossing Indian film domestically. Kaushal was awarded with the National Film Award for Best Actor (shared with Ayushmann Khurrana for Andhadhun) and was nominated for the Filmfare Award for Best Actor.