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Udaya Bhanu was born in Sultanabad, Karimnagar, Telangana, India. Her father S. K. Patel was a doctor, her mother Aruna is an Ayurvedic doctor. She has one brother, Lenin, who works as a software engineer. Her father also worked as a poet; Udaya Bhanu was named after his pen name. He died when Udaya Bhanu was four years old.

Bhanu made her acting debut in R. Narayana Murthy's Erra Sainyam (1990), when she was studying in 10th class. She appeared in few more Telugu films, including Kondaveeti Simhasanam (2002), Qaidi Brothers (2002) and Shravana Masam (2005). She also played lead roles in a couple of Kannada films and has acted in an unreleased Tamil film Chinna Ramasamy Periya Ramasamy co-starrig Jayaram by R. V. Udayakumar. She performed item numbers in three Telugu films Aapada Mokkula Vaadu (2008), Leader (2010) and Julai (2012) alongside Allu Arjun