Subhash Ghai was born to a dentist father who practised in Delhi, Subhash did his higher secondary in Delhi and thereafter graduated in Commerce from Rohtak, Haryana. Next he moved to Pune, Maharashtra to join the Film and Television Institute of India, Law College Road (FTII). After attaining a diploma, he started working in the Indian film industry in 1970.

He started his career in Hindi cinema as an actor with small roles in six films, like Taqdeer (1967) and Aradhana (1971). He was the male lead in the 1970s Umang, and Gumraah (1976) with Reena Roy and Danny. His directorial debut was the film Kalicharan (1976) which he obtained through a recommendation by Shatrughan Sinha. As of 2005, he had written and directed 15 movies. In 1982, he started Mukta Arts Private Limited which, in 2000, became a public company, with Subhash Ghai as its chairman and managing director.

At the peak of his directorial career in the 1980s and 1990s, he formed a collaboration with Dilip Kumar whom he directed in Vidhaata (1982), Karma (1986) and Saudagar (1991), the latter for which he won the Filmfare Best Director Award. He helped establish the careers of Jackie Shroff and Anil Kapoor, introducing Jackie as a leading actor in Hero (1983) and directed Kapoor in Meri Jung (1985) for which he was nominated for a Filmfare Best Actor Award. He went onto frequently work with both actors casting them together in the films Karma (1986), Ram Lakhan (1989) and Trimurti (1995) which he had produced and was directed by Mukul S. Anand. His 1993 release Khalnayak starring Sanjay Dutt, Madhuri Dixit and Shroff featured the controversial song "Choli Ke Peeche Kya Hai".

In 1997 he directed Pardes which starred Shahrukh Khan and introduced Mahima Chaudhry and Apoorva Agnihotri. In 1999 he directed Taal which starred Akshaye Khanna, Aishwarya Rai and Anil Kapoor. Both Pardes and Taal were released internationally and featured in the top 20 movies in the U.S. box office charts for several weeks. His following films were Yaadein (2001) and Kisna (2005).


He then took a break from directing and turned producer with films such as Aitraaz (2004), 36 China Town (2006) and Apna Sapna Money Money (2006).

In 2006, he set up his own state-of-the-art film institute Whistling Woods International in Mumbai. The institute trains students in filmmaking: production, direction, cinematography, acting, animation, etc. Like Alfred Hitchcock he is known to give brief cameos in his directorial ventures.

After a three-year hiatus from directing, he returned in 2008 with Black and White released on 7 March 2008 and, later Yuvvraaj released in November 2008.