Kumar was born in Amritsar, India to Hari Om Bhatia (military officer) and Aruna Bhatia. He has a sister, Alka Bhatia. He lived and grew up in Delhi's Chandni Chowk and later he moved to Mumbai where he lived in Koliwada. He received his school education from Don Bosco School and enrolled in Mumbai's Guru Nanak Khalsa College for higher education, but dropped out after a year. He was a black belt in Taekwondo and got his formal Martial Arts training in Bangkok. He even learned Muay Thai—a combat sport of Thailand and worked as a chef and waiter. He worked as an assistant for photographer Jayesh Sheth for 18 months without payment to shoot his first portfolio. He got married to Twinkle Khanna, the daughter of actors Rajesh Khanna and Dimple Kapadia, on 17 January 2001. They have two children; son Aarav and daughter Nitara, born on 25 September 2012.
His first appearance as the lead actor was in Saugandh (1991). His first live show was held in 1991 in Delhi. Akshay’s Kambakkht Ishq, opposite Kareena was the first Indian film to be shot at Universal Studios and featured cameo appearances by Hollywood actors.
In 2004, he was honored with the Rajiv Gandhi Award for his outstanding achievements in Bollywood. In 2008, the University of Windsor conferred an Honorary Doctorate of Law on Kumar in recognition of his contribution to Indian cinema and has taken Canadian citizenship. In 2009, he was awarded the Padma Shri by the Government of India.and also awarded the highest Japanese honor of "Katana" and a sixth-degree black belt in Kuyukai Gōjū-ryū karate. In 2009, he founded the Hari Om Entertainment production company. In 2012, he founded another production company called Grazing Goat Pictures. On 9 April 2017, Kumar and Union Home Minister Rajnath Singh promoted a mobile phone app, Bharat Ke Veer, which allows users to donate money to families of people who sacrificed their lives for India.