D'Souza received her first Filmfare Award in 2006 for her performance in the Telugu romantic film, Bommarillu, which earned her critical acclaim. In 2008, she gave critically acclaimed performances in Santosh Subramaniam, a Tamil remake of Bommarillu. Having acted in several commercially successful movies in Telugu and Tamil, D'Souza has established herself as one of the leading actresses of the South Indian film industry. In addition to movie acting, D'Souza has hosted the television show Big Switch, and is the brand ambassador of Fanta, Virgin Mobile India, Fastrack, LG Mobiles, Garnier Light, Margo, and Perk in India. 

Born in Mumbai into a Mangalorean Catholic family, D'Souza was raised a Roman Catholic in the Bandra suburb of Mumbai. Her mother Jeanette D'Souza was formerly a managing director with a Pharma Multinational corporation (MNC), who left her job in 2004 to help Genelia with her career. Her father Neil D'Souza, is a senior official with Tata Consultancy Services (TCS). She also has a younger brother, Nigel D'Souza, who works with the Bombay Stock Exchange. According to D'Souza, her name "Genelia", means "rare" or "unique". D'Souza studied at the Apostolic Carmel High School in Bandra and later joined St. Andrew's College in Bandra to pursue her Bachelor's Degree of Management Studies. She completed her degree while shooting for her first film, Tujhe Meri Kasam in 2003 and initially thought that an MNC job would suit her. She liked sports and studies in college and was a state level athlete, sprinter, and a national level football player. 

D'Souza did her first modeling assignment at the age of 15, the result of being spotted as the bridesmaid at a wedding. She was selected for the Parker Pen commercial with Amitabh Bachchan, just two days before her exams, and had to shoot the next day. Initially she refused, because of her exam the next day, but the director persuaded D'Souza to shoot for the commercial. She gained wide attention from the Parker Pen commercial with Amitabh Bachchan, who said "she was good, and her expressions were spontaneous". 

She further did a Fair and Lovely 2003 Cricket World Cup advertisement with cricketer Krishnamachari Srikkanth. When D'Souza was offered a role in Tujhe Meri Kasam, initially she turned it down, as she was not keen to pursue a career in acting. But the crew insisted and kept contacting her for two months, and she agreed when she saw the Telugu version of the movie. Tamil director, S. Shankar was impressed with her performance in the Parker Pen commercial and decided to cast her in a leading role in his 2003 Tamil film Boys. D'Souza was selected among 300 girls, who had auditioned for the movie. She signed three movies simultaneously in three different languages, Tujhe Meri Kasam (Hindi), Boys (Tamil), and Satyam (Telugu).