Prakash Raj was born as Prakash Rai on March 26, 1965, to a Tuluva father and a Kannadiga mother in Bangalore, Karnataka. He completed his schooling at St. Joseph's Indian High School and joined St. Joseph's College of Commerce, Bangalore.

Actress Geetha introduced Prakash Raj to prominent Tamil film director K. Balachander. Prakash Raj changed his surname from 'Rai' to 'Raj' upon K. Balachander's advice.

He has been doing theatre since he was in the seventh grade. The actor used to earn Rs 300 per month for stage shows in the early stages of his career. He was also an avid supporter of street theatre and has over 2,000 performances to his credit.

Prakash is a recipient of the honourable Padma Shri award, which is the fourth-highest civilian award in India. He has also received five National Awards.

The actor made his acting debut in cinema with the Tamil film Duet, which was released in 1994. Since then, he has worked in numerous films across industries and is known for his negative characters.

Aside from reading and acting, the actor is a big fan of farming. In Hyderabad, he owns a pesticide-free organic farm.

Prakash Raj's total net worth is Rs 50 crore. He owns his own production company, Duet Movies. He owns houses in Mumbai and Chennai, as well as a farmhouse. The actor has adopted a village in the backward Mahbubnagar district of Telangana.

Telugu film producers have banned Prakash Raj six times for working in the film industry and for his alleged bad behaviour. There were reports in the South film industry and media that some big heroes and producers had conspired against him.

Prakash Raj has not kept a manager to date. According to him, he decides his fees himself. “I am the only actor in the industry who has not kept a manager to date. I decide everything myself, from attending phone calls to film selection, story, and fees. Not only this, but I also donate 20 per cent of my earnings to charity,” the actor said.

It was in 1994 that Prakash Raj got married to his first wife, Lalitha Kumari. They had three children: two daughters, Meghna and Pooja, and a son, Sidhu. However, tragedy struck the family as their son Sidhu died when he was five. The doting father confirmed that his son died due to severe bodily complications, which he suffered while flying a kite in January 2004.

After the demise of Sidhu, a series of conflicts started rising between Prakash Raj and his first wife, Lalitha Kumari. Despite their continued efforts, they were unable to make peace with each other. Hence, the actor divorced Lalitha, against her wishes, in 2009.

It was on August 24, 2010, that Prakash Raj got married to ace choreographer Pony Verma. At the time of their marriage, Prakash was 45, while Pony was 33. Despite their age difference of 12 years, they tied the knot. In 2015, Prakash Raj and Pony welcomed their first child, a baby boy, whom they lovingly named Vedhanth.