Chatterjee was born on 23 November 1980 in Pune, Maharashtra, to a Bengali Hindu family. Her father was a business executive and her mother was a political science professor. Her family traveled and lived out of the country for some time, then moved to Delhi.[3] She majored in Chemistry at Delhi University before entering the National School of Drama.[4]
Chatterjee played a major role in Bhopal: Prayer for Rain in which she starred with Martin Sheen.[6] She was the lead in Road, Movie with Abhay Deol and as earned the moniker Princess of Parallel Cinema in the Indian press.[7] Chatterjee was referred by the Indian media as the chief flag bearer at the 62nd Cannes Film Festival. She starred in the 2009 film Bombay Summer.[8] She was the lead in Lucy Liu's film Meena based on the book Half the Sky.[9]
Tannishtha's Canadian film Siddharth was in official selection at the 70th Venice Film Festival and the 2013 Toronto International Film Festival. She is the only Indian actress whose films have been selected in three of the major international film festivals in the same year.[14]
Her other notable projects are Parched directed by Leena Yadav which opened in Toronto, Australian romantic comedy Unindian with Brett Lee[15]Island City which won the best debut director( Ruchika Oberoi) in Venice and Garth Davies's film LION co-starring Nicole Kidman and Dev Patel.[16] Her film Angry Indian Goddesses received acclaim in Toronto and Rome international film festivals. In March 2016 Tannishtha was given a special award in a ceremony held at the BAFTA for her contribution to Asian Cinema.[17] She won the best actress for the film Parched along with three other actresses in Festival 2 Valenciennes and the Indian Film Festival of Los Angeles 2016.[18] She was the president of the jury of the MOOOV film festival in Belgium in 2016.[19]
She won the best actress at the Pune International Film Festival 2017 for her role in Dr. Rakhmabai.[20]
In 2019 Tannishtha made her directorial Debut Roam Rome Mein which had its World premier at Busan International Film Festival where she won the Asia Star Award.
Tannishtha speaks quite often on the issue of race/colorism in Indian media. She has walked out during a roast when her skin color was the subject of jokes.[22] She explored racism in Indian film and TV industry on Mithaq Kazimi's talk show series.[23] Personally, she adopted a baby girl and has encouraged others to do the same.[24]