Neelam Kothari was born in Hong Kong. She is a Gujarati-Iranian. As a child, she learnt to play the keyboard and danced Jazz Ballet. Her family has a traditional jewellery making business, making high-class pieces. She was educated at Island School, where she was a member of Rutherford house. After her childhood in Hong Kong, her family moved to Bangkok. Neelam was holidaying in Mumbai when she was approached by director Ramesh Behl. She decided to give acting a shot and signed for the film Jawaani (1984) alongside Karan Shah, Tina Munim's nephew. But the film was a major flop commercially.