In 1967, the 20-year-old Rakhee acted in her first Bengali film Badhu Baran, after which she was offered the lead role in Rajshri Productions’ Jeevan Mrityu (1970) opposite Dharmendra.

In 1971, Rakhee played a double role opposite Shashi Kapoor in Sharmilee, and also starred in Lal Patthar and Paras; all three films became hits and she established herself as a leading actress of Hindi Cinema. Shehzada (1972) opposite reigning superstar Rajesh Khanna and Aankhon Aankhon Mein (1972) opposite a relative newcomer Rakesh Roshan showcased her comic abilities though their box office performance was unsatisfactory. She continued to display versatility even in relatively small roles in Lal Patthar, Heera Panna (1973) and Daag: A Poem of Love (1973), with her strong performances. The phenomenal success of Rajshri Productions’ Tapasya (1976) a heroine-dominated movie where she played the sacrificing sister opposite Parikshit Sahni established her as a box-office name to reckon with. Rakhee regards her performances in Blackmail (1973), Tapasya (1976) and Aanchal as her best.

In 1981, a 23-year-old aspiring director Anil Sharma asked her to star in an out and out female oriented role in his debut film Shradhanjali. After the success of the film Raakhee was flooded by strong heroine-dominated roles. At the peak of her career as a popular heroine, she surprised everyone by accepting strong character roles as sister-in-law to Rajesh Khanna in Aanchal (1980), Shashi Kapoor and Amitabh in Shaan (1980), Mithun Chakraborty in Dhuan, and mother to Amitabh in Shakti (1982) and Rishi Kapoor in Yeh Vaada Raha (1982).

In 2003 she appeared in Rituparno Ghosh directed film Shubho Mahurat for which she won the National Film Award for Best Supporting Actress.

In her second marriage, Raakhee married film director, poet and lyricist Gulzar. The couple have a daughter, Meghna Gulzar. When their daughter was only one year old, they separated. After completing her graduation in films from New York University, Meghna went on to become a director of films including Filhaal…, Just Married and Dus Kahaniyaan, and authored a biography of her father in 2004.

In one of her interviews, she said in 2012 that her favourite heroes were Rajesh Khanna and Shashi Kapoor.

In 2019 Kolkata International Film Festival the film Nirbon directed by Goutam Halder was premiered, where Rakhee portrayed the role of Bijolibala, a seventy years old lady with a strong conviction. “Doing films is not on my agenda right now, but the story fascinated me” Rakhee said about the adaptation of Moti Nandi’s novel Bijolibalar Mukti.