She made her debut as an adult in 1989, with T. K. Rajeev Kumar’s Malayalam blockbuster Chanakyan, opposite Kamal Haasan. Her Bollywood adult debut came with N. Chandra’s 1991 action drama Narsimha. Upon release, the film emerged a commercial success. Matondkar played the role of Meenu S. Singh, the rebellious daughter of Baapji (played by Om Puri), a goon lord and capitalist of the city. She next starred in Rajiv Mehra’s ghost comedy Chamatkar, alongside Shah Rukh Khan (1992). Her first Telugu film came with the action-crime Antham, and its Hindi bilingual Drohi opposite Akkineni Nagarjuna. She played Bhavna, an ornithologist who is in love with Nagarjuna’s character. Upon release, the film received positive reviews from critics. The film marked first of her many collaborations with director Ram Gopal Verma. In 1993, Matondkar appeared in Shreemaan Aashique opposite Rishi Kapoor and Bedardi opposite Ajay Devgn— both these films failed critically and commercially. Varma’s Telugu political thriller Gaayam (1993) was her next release. The film garnered positive reviews, with six state Nandi Awards, and emerged a Super Hit at the box office. Matondkar’s performance earned her a Nandi Award for Best Supporting Actress.

In 1995, Matondkar established herself as a leading actress of contemporary Hindi cinema by featuring in Varma’s musical romance Rangeela, one of the top-grossing productions of the year. Co-starring Aamir Khan and Jackie Shroff, the film emerged as a blockbuster with a gross of ₹334 million. Matondkar played Mili Joshi, an effervescent fun-loving friend of a street-toughened orphan, who ambitions of becoming an actress. At the 41st Filmfare Awards, Rangeela was nominated for 12 awards including a first Best Actress nomination for Matondkar. The film was screened at the International Film Festival of India. In the same year, she also starred alongside Mohanlal in the Malayalam action Thacholi Varghese Chekavar. She played Maya, the only witness in a homicide who is kept under house arrest by her parents.

In 1996, she played Sapna, the daughter of an RTO official in S. Shankar’s Indian (1996), which marked her first Tamil film. It was also dubbed and released in Hindi under the title Hindustani. Featuring Kamal Haasan in dual roles alongside Matondkar and Manisha Koirala, it was the most expensive Indian film at that time, with a budget of ₹150 million. Nirupama Subramanian of India Today felt the film was a commercial potboiler and wrote, “Indian has dances, foot-tapping melodies by A. R. Rahman and two pretty women, Manisha Koirala and Urmila Matondkar”. Both Indian and Hindustani were commercial successes. The film was India’s official entry for the Best Foreign Language Film for the Academy Awards in 1996, but was not nominated.

In 1999, Matondkar had six film releases; four of them − Jaanam Samjha Karo, Hum Tum Pe Marte Hain, Mast and Dillagi − were commercial failures. However, Matondkar’s performances were generally well received by critics, (nn a review for Jaanam Samjha Karo, Rediff stating, “Urmila is just about the only heroine who can give Karisma a run for her money when it comes to pelvic thrusts”). Her first hit that year was Varma’s psychological horror thriller Kaun, opposite Manoj Bajpayee, where she played a nameless character. Khalid Mohamed of The Times of India (who would later cast her in Tehzeeb) wrote, “She rivets the viewer’s interest, carrying off entire reels on her shoulders, through a gamut of quicksilver facial expressions. Vulnerable and baffled, she is utterly believable as the traumatised girl-next-door”. Matondkar next played the love interest of Sanjay Dutt’s character in the action comedy Khoobsurat. It emerged as a box-office hit.

During the 2000s, Matondkar revealed strong, dramatic and psychological features in her roles, and delivered a number of critically acclaimed performances. In 2000, Matondkar re-united with Varma for the action Jungle, alongside Fardeen Khan and Sunil Shetty. She played Anu, who is hostaged by the chief of bandits, when he starts liking her. Taran Adarsh of Bollywood Hungama wrote, “Urmila Matondkar is at ease in a role that gives her ample scope to showcase her talent. Her scenes with Durga can easily be singled out, for they have been shot with brilliance.” The film was both critically and commercially successful. She next starred opposite Govinda in David Dhawan’s romantic comedy Kunwara. The film underperformed at the box office, with a grossing of ₹182 million (US$2.6 million).

In 2002, Matondkar appeared alongside an ensemble cast (Waheeda Rehman, Anil Kapoor, Fardeen Khan, Mahima Chaudhary, Abhishek Bachchan and Tara Sharma), in the drama Om Jai Jagadish. She played the role of Neetu, the love interest of the protagonist (played by Fardeen Khan). The film failed commercially. Anees Bazmee’s psychological thriller Deewangee was her next release. She played Sargam, a popular singer, who is the object of conflict between the protagonist and antagonist. Co-starring Ajay Devgan and Akshaye Khanna, the film was well received by critics and was moderately successful at the box office. Deepa Gumaste, writing for Rediff, praised the performances of the three leads and wrote: “As usual, the heroine has little to do apart from looking cute in the first half and scared in the second. It is another matter that she is supposed to be the object of the film’s conflict. For what it is worth, Urmila Matondkar executes her part well”.

In 2003, following the success of Bhoot, Pinjar and Tehzeeb, Matondkar featured in Rediff’s annual Top Bollywood actresses listing. Planetbollywood.com described Matondkar as “a force to reckon with in the industry”.

In 2004, Matondkar starred in the thriller Ek Hasina Thi. The film (which marked the debut of Sriram Raghavan) tells the story of a Satika Vartak, a deceived woman, played by Matondkar, who is jailed and arrested for having links with the underworld, because of her lover, played by Khan, and later flees from prison to seek revenge on him. Upon release, the film was positively received by critics, with Matondkar’s performance earning praise. The Deccan Herald commented: “An author-backed role ensures that Urmila gets to do everything just right. Whether it’s kicking a bully into shape in the dreary prison of which she’s an inmate or whether it’s making nice with Karan while plotting his ruin, she’s a total treat. She carries off the transition from naive to knowing effortlessly. Seductive and steely, she’s quite explosive.” The film was a box office success. For her performance, Matondkar received nominations at the Filmfare, Screen, Zee Cine and IIFA ceremonies. The film was premiered at the New York Asian Film Festival.

In 2005, she played the title role in the horror Naina. The film tells the story of Matondkar’s character who after receiving an eye transplant, realises that she can see into the supernatural world. The film was premiered in the Marché du Film section at the 2005 Cannes Film Festival. She next starred as Trisha Chaudhary, a caring daughter of Professor Uttam Chaudhary, played by Anupam Kher, in Jahnu Barua’s art drama Maine Gandhi Ko Nahin Mara. The film was well received by critics, with Rediff stating, “Her credibility as a versatile actress is further established in her reserved albeit realistic delivery of emotions.” Matondkar won her second Bollywood Movie Award for Best Actress. In 2006, she appeared in Pankaj Parashar’s romance Banaras: A Mystic Love Story with Ashmit Patel and Dimple Kapadia. The film was not well received by critics, with Raja Sen commenting: “And then there’s Urmila. Let’s start with the good. She looks great, refreshingly beautiful and striking. That’s about it. This is an actress who has worked hard to earn respectability, but this role, like the film itself, suffers from inconsistency”. Her next release was Onir’s Bas Ek Pal (2006).

In addition to her acting career, Matondkar has participated in several stage shows and televised award ceremonies. In 2007, she lent her voice for Asha Bhonsle’s album Asha and Friends Vol 1, where she performed with Bhonsle for a duet song “Mehbooba Dilruba”. Later that year, she featured as a talent judge for the second season of Sony Entertainment’s dance reality show Jhalak Dikhhla Jaa alongside Jeetendra and Shiamak Davar. She described her experience of judging Jhalak Dikhhla Jaa by saying, “I’m ecstatic about being able to be part of this show. I was facing the participants and audience for the first time. There were no written lines, no cues, no second chances. Either it worked or it didn’t work for you. It was a concept that I liked.”

In 2008, Matondkar presented Sony TV’s singing reality show Waar Parriwar. In 2011, she co-judged Colors’ dance reality show Chak Dhoom Dhoom, along with Javed Jaffrey and Terence Lewis and in 2012, she featured as one of the jury of Zee Marathi’s Dance Maharashtra Dance, where the dancers from Maharashtra demonstrated their dancing prowess through different dance forms.

Her next release was the thriller Karzzzz (2008), a remake of Karz (1980), alongside Himesh Reshammiya. The film was a major critical and commercial failure, however, Matondkar was praised for her portrayal and adding her own flavour to the role of Kamini. The same year, she re-united with Sanjay Dutt for EMI. In 2012, she provided her voice to the role of Begum in the computer-animated comedy Delhi Safari.

Her next release was the crime Satya, for which she received another Filmfare Best Actress nomination. The film was received favourably by critics and was a huge hit at the box office, solidifying Matondkar’s position as a leading lady of Bollywood. Satya was on CNN-IBN’s 2013 list of the 100 greatest Indian films of all time, in the 100 Filmfare Days series and on the “70 iconic movies of independent India” list. It was mentioned in Rachel Dwyer’s 100 Bollywood Films (where she called it a “masterpiece”), and in critic and author Shubhra Gupta’s 50 Films That Changed Bollywood, 1995-2015.

During her years in the film industry, Matondkar has been involved in different charitable organisations and has particularly supported women’s causes in India. In February 2013, Matondkar along with Parineeti Chopra, walked for Manish Malhotra in London, England, to support the Angeli Foundation – a charity that works to empower the Girl Child in India. She has walked the runway for designers such as Manish Malhotra and Rohit Verma.

Matondkar made her Marathi film debut with Ajoba in 2014. She portrayed Purva Rao, a wildlife activist in search of leopards. Daily News and Analysis wrote, “..this one’s another jewel in her crown. She portrays Purva with a mild aggressive and rebellious streak. But all of these are an undercurrent to Purva’s actions.” After a four-year hiatus, Matondkar made a special appearance in a song of the dark comedy Blackmail (2018).

Matondkar married Kashmir based businessman and model Mohsin Akhtar Mir on 3 March 2016.

Matondkar has been described by critics as one of the most talented actresses in Bollywood. In 2016, film critic Subhash K. Jha analysing Matondkar’s work, wrote:” Her days of glory while they lasted created a body of work that was as curvaceous as her body: Rangeela (Ram Gopal Varma’s only romantic film), Satya (where in spite of Manoj Bajpai, she held her own, especially in a key breakdown sequence and in that lilting Lata Mangeshkar melody ‘Gila Gila Paani’ which was cut out of the film), Kaun (where her horror act was chilling), Pinjar (a masterly adaptation of Amrita Pritam’s novel about a rape victim during the Partition), Ek Haseena Thi (where she played hero to Saif Ali Khan’s villain), Pyar Tune Kya Kiya (she was heartbreakingly poignant as a victim of unrequited love), Maine Gandhi Ko Nahin Mara (spirited as a daughter trying to cope with a father suffering from Alzeihmer’s), Khubsoorat (she played the Plain Jane who transforms into ..ummm.. Urmila Matondkar)…and so many others.

Matondkar joined the Indian National Congress on 27 March 2019. She contested from Mumbai North constituency in the 2019 Lok Sabha Election, but lost. On 10 September 2019, she resigned from the party, citing petty internal politics.