In 2005 Balan garnered praise for her first Hindi film, Parineeta, and followed it with a leading role in the blockbuster Lage Raho Munna Bhai (2006). Her subsequent portrayal of glamorous characters in the films Heyy Babyy (2007) and Kismat Konnection (2008) met with negative comments from film critics. The year 2009, however, marked the beginning of the most successful period in Balan's career as she portrayed five consecutive roles to wide critical acclaim in Paa (2009), Ishqiya (2010), No One Killed Jessica (2011), The Dirty Picture (2011), and Kahaani (2012). These roles have earned her the tag of a "female hero" and established her as a leading contemporary actress of Hindi cinema.
Balan has received one National Film Award, five Filmfare Awards and five Screen Awards. She initially drew criticism for her fluctuating weight and poor dress sense, but was later credited in the media for retaining her individuality and breaking stereotypes of a Hindi film heroine. Balan is a social activist and supports the empowerment of women. In December 2012, she married film producer Siddharth Roy Kapur.
Saraswathy Balan, a homemaker. According to Balan, they speak a mix of Tamil and Malayalam at home; she is also well versed in Hindi, Marathi, English and Bengali. Her elder sister, Priya Balan, works in the field of advertising.
Balan grew up in the suburban neighbourhood of Chembur, Mumbai and was schooled at St. Anthony Girls' High School. From a young age she aspired to a career in film and was inspired by the work of actors Shabana Azmi and Madhuri Dixit. At the age of sixteen, she starred in the first season of Ekta Kapoor's sitcom Hum Paanch as Radhika, a bespectacled teenager. Following the success of the show, Balan refused director Anurag Basu's offer to star in a television soap opera, as she wanted to concentrate on a film career. Her parents were supportive of her decision but encouraged her to complete her education first, so she attended St. Xavier's College to pursue a bachelor's degree in sociology and later earned a master's degree from the University of Mumbai.
In 2005, Balan made her Hindi film debut with Pradeep Sarkar's musical drama Parineeta. Before being cast for the film, Balan had to undergo extensive auditions for a period of 6 months. The film, an adaptation of Sarat Chandra Chattopadhyay's novel of the same name, narrated the love story of an idealist Lalita (Balan) and an egoist Shekhar (Saif Ali Khan), the son of a capitalist businessman. Her performance in the film was praised by critics; Derek Elley from Variety wrote, " An acting revelation is Tamil newcomer Balan, whose devoted but dignified Lalita is the picture's heart and soul." Parineeta fetched her a Best Debut (Female) award and a nomination for Best Actress at the annual Filmfare Awards ceremony.
The following year, Balan appeared opposite Sanjay Dutt in Rajkumar Hirani's comedy film Lage Raho Munna Bhai. She portrayed the role of Jhanvi, a radio jockey and the love interest of the protagonist Munna Bhai. To prepare for her role, she met with a couple of radio jockeys and watched them at work. Her performance was critically well received, and the film emerged as a blockbuster with gross earnings of 118.57 crore (US$21.58 million).
In 2007, Balan featured in a supporting role in Mani Ratnam's semi-biographical drama Guru as a woman suffering from multiple sclerosis. The film, which starred Mithun Chakraborty, Abhishek Bachchan, Aishwarya Rai Bachchan, and R. Madhavan in leading roles, performed well at the box office. However, film critics Khalid Mohamed and Raja Sen noted that her "talent was wasted" in a "minuscule role". Her next release was Nikhil Advani's Salaam-e-Ishq: A Tribute To Love, a romantic comedy featuring an ensemble cast, in which she was paired opposite John Abraham. The film, which narrated six individual love stories, saw Balan play the role of a television reporter, Tehzeeb Hussain, suffering from a memory loss condition. The film, which was a critical and commercial failure, generated positive reviews for Balan. Sukanya Verma of Rediff.com wrote, "Vidya's transformation from a self-assured working woman to a helpless, vulnerable person is superb."
Balan then took a supporting role in Vidhu Vinod Chopra's suspense thriller Eklavya: The Royal Guard, alongside Amitabh Bachchan, Boman Irani, Sharmila Tagore, Saif Ali Khan, and Sanjay Dutt. The film, which flopped commercially, met with positive critical reviews and was selected as India's official entry to the Oscars for the 80th Academy Awards. She was later cast as Isha Sahni, a single mother, in Sajid Khan's Heyy Babyy, alongside co-stars Akshay Kumar, Ritesh Deshmukh, and Fardeen Khan. The comedy film was a box-office success, but garnered negative reviews from critics, as did Balan's performance; CNN-IBN's Rajeev Masand criticised her wardrobe and make-up, and considered her the "sore thumb" of the film.
Balan's final film in 2007 was Priyadarshan's psychological thriller Bhool Bhulaiyaa, a remake of the Malayalam film Manichitrathazhu (1993). Balan featured as Avani Chaturvedi (a character played by Shobana in the Malayalam original), a woman suffering from dissociative identity disorder. Co-starring Shiney Ahuja, Akshay Kumar, and Ameesha Patel, Bhool Bhulaiyaa was a commercial success with a worldwide revenue of over 83 crore (US$15.11 million). Reviewers, while being generally negative of the film, were appreciative of Balan's performance. Writing for Hindustan Times, Khalid Mohamed described her as "bankably likeable" and Bollywood Hungama's Taran Adarsh labelled her as "splendid". The role earned Balan a second Filmfare nomination in the Best Actress category.
In 2008's social film Halla Bol, Balan played a supporting role alongside Ajay Devgn and Pankaj Kapur. The film was based on the life of activist Safdar Hashmi, who was killed by political rivals while performing on a street play (by the name of Halla Bol) in 1989. The film was a critical failure. Later that year, she co-starred with Shahid Kapoor in Aziz Mirza's romantic comedy Kismat Konnection. A commercial failure, the film and her performance generated a negative response; critic Sonia Chopra commented, "[Balan] is made to look downright drab. The haircut is unflattering, the make-up too plain, the clothes usually in off-white or brown. Plus the character is repetitive and reminds us of the one she played in Lage Raho Munnabhai.