She was born on June 1, 1929 as Fatima Rashid in Rawalpindi, British India, daughter to Jaddanbai and Uttamchand Mohanchand, a former Hindu Mohyal Brahmin who converted to Islam as Abdul Rashid. Her mother was a well-known dancer, singer, actor, composer, and director. This is what paved the way for Fatima to become a child artiste (Baby Nargis) as early as 1935. She is the sister of Bollywood actor, Anwar Hussain and Akhtar Hussain.
Raj Kapoor was the son of well-known Indian actor Prithviraj Kapoor, who acted both in film and on stage. After apprenticing in the Bollywood production studios of the 1940's, at 24 years of age Raj Kapoor produced, directed and acted in Aag (1948), with his new company, RK Films. His next production, Barsaat (1949), was a smash hit. In 1951, he also produced, directed and starred in Awaara (1951), which was another megahit, and costarred Nargis, who had appeared in Aag and Barsaat.