The filmmaker threw a huge bash at Taj Lands End in Bandra, with a guest list that included over 100 invitees.
Said Karan, "I am not at all happy about turning 35, so I threw a party to celebrate my depression. I think I'm growing old too quickly! Yesterday, I even coloured my grey hair black!" Dilshad, his personal hairstylist, did the honours.
He is currently scripting a story about the pain, anguish and suffering of an Indian couple post 9/11 in New York. Karan plans to cast his favourites stars - Shah Rukh Khan and Kajol - for the main roles. But he is not willing to reveal anything right now.
"I am working on the script now so it is too early to talk about the film. I make movies based on stories I believe in," he said, while in the capital to launch Britain-based luxury brand Alfred Dunhill as its brand ambassador.
Apart from the glitz and glamour, the director has also pitched in to share his knowledge and experience with the world. Last year he spoke at the Wharton India Economic Forum held at the prestigious Wharton School of University of Pennsylvania in Philadelphia as well as at the Hindustan Times Leadership Summit in New Delhi in November 2006.
The same year he became the first Indian filmmaker to be a jury member in the Miss World competition in Warsaw, Poland.
After making an impressive start with "Kuch Kuch Hota Hai", starring Shah Rukh and Kajol in 1998, Karan's popularity soared with his second movie "Kabhi Khushi Kabhie Gham" in 2001. The star-studded family drama was a huge success and it cemented his position in Bollywood.
But he wasn't so lucky when he made his third film "Kabhi Alvida Naa Kehna" (KANK) about marital discords. Critics panned it, his fans rejected and the film fell flat at the box office. And he was baffled by the response.
"I didn't know what went wrong with my film," he was quoted as saying about KANK on his chat show "Koffee With Karan".
Though he's worked with almost all A-list actors like Amitabh Bachchan, Shah Rukh Khan, Kajol, Rani Mukerji, Preity Zinta, Salman Khan and Abhishek Bachchan, he says he is dying to work with Aamir Khan.
"I haven't worked with him yet. He is absolutely wonderful and I would love to work with him."
Once an obnoxiously fat child, who never wanted go out of his house fearing people would stare at him, Karan has certainly come a long way. But he says that he never planned anything.
"Things just happen and I enjoy it," said Karan, who promises to return to the small screen with a chat show for NDTV's entertainment channel NDTV Imagine.
He will also soon be seen on the cover of fashion magazine L'Officiel as part of its five-year celebrations.