Kajal was born in Mumbai to Vinay Aggarwal, an entrepreneur, and Suman Aggarwal, a confectioner. She has a younger sister, Nisha Agarwal, who is also an actress appearing in Telugu and Tamil films. She studied at St. Anne’s High School, Colaba, Mumbai and Jai Hind College, Mumbai .She graduated from K.C. College, Mumbai with a degree in Mass Media specialising in advertising and marketing. In her final year of college, she did an internship with Loreal and started her modelling career. She was planning on pursuing an MBA in Brand Management before deciding to pursue acting.
Aggarwal made her acting debut with the 2004 Bollywood film Kyun! Ho Gaya Na. and had her first Telugu film release in 2007 Lakshmi Kalyanam. In the same year, she starred in the box office hit Chandamama, which earned her recognition. The 2009 historical fiction Telugu film Magadheera marked a turning point in her career, earning her critical acclaim. It ranks among the highest-grossing Telugu films of all time and fetched her Best Actress nominations at several award ceremonies including Filmfare.
She subsequently rose to prominence by starring in several critical and commercially successful Telugu films like Darling (2010), Brindavanam (2010), Mr. Perfect (2011), Businessman (2012), Naayak (2013), Baadshah (2013), Govindudu Andarivadele (2014), Temper (2015) and established herself as one of the leading and highest-paid actresses in Tollywood.
Aggarwal made her acting debut in the 2004 Bollywood film Kyun…! Ho Gaya Na, in which she had a minor supporting role as the friend of Diya. She signed veteran Tamil director Bharathiraja’s Bommalattam, alongside Arjun Sarja. The film got delayed and released in late 2008.
Aggarwal made her debut in the Telugu film industry and played her first leading role in 2007 in Teja’s Lakshmi Kalyanam alongside Kalyan Ram; it did not fare well at the box office. Later that year, she appeared in the Krishna Vamsi-directed Chandamama, which opened to positive reviews and became her first major successful film. In 2008, she had her first Tamil film release, Perarasu’s action entertainer Pazhani, co-starring Bharath. She had two more Tamil releases that year with Venkat Prabhu’s comedy-thriller Saroja, in which she did a guest appearance, and Bharathiraja’s investigative thriller Bommalattam. Although the former went on to become a commercial as well as a critical success, both films failed to boost her career as her roles were too insignificant. Her Telugu releases, Pourudu and Aatadista opposite Sumanth and Nitin, respectively, did not receive positive reviews; both were successful at the box office.
Kajal gained further recognition by featuring as the female lead in the high-profile Tamil projects Naan Mahaan Alla (2010), Maattrraan (2012), Thuppakki (2012), Jilla (2014), Maari (2015) and emerged as a leading actress in Kollywood as well. She made a comeback to Bollywood with Singham (2011).