Kapoor was born to actor Pankaj Kapoor and actor/classical dancer Neelima Azeem on 25 February 1981. Kapoor's parents divorced when he was three. After the divorce, he lived with his mother. He shared a good relationship with his father and stepmother Supriya Pathak.
He studied in Rajhans Vidyalaya, Mumbai. Kapoor is a vegetarian. He has three half siblings: a sister named Sanah and brothers named Ruhaan and Ishaan Khattar; Ishaan acted with him in the movie Vaah! Life Ho To Aisi (2005). His maternal grandfather was Anwar Azeem, a noted Marxist journalist and author from Bihar. His great great grandfather was the film director, screenwriter, Urdu novelist and journalist Khwaja Ahmad Abbas more popularly known as K. A. Abbas. His mother Neelima is the daughter of Anwar Azeem, one of the greatest Urdu writers. K.A. Abbas in turn was the grandson of Hali, the chief protégé of Urdu poet, Ghalib.
While filming Fida (2004), Kapoor began dating Kareena Kapoor. They dated for three years and then separated during the filming of Jab We Met (2007). According to him, they remained on good terms, with him saying, "I wish her all the happiness in the world. I have great respect for her. She is a wonderful girl."
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