She came from a distinguished background, grand-niece of the Nobel Laureate Rabindranath Tagore, her father, Col. M.N. Chaudhuri, was the first Indian Surgeon-General of Madras.
She completed her early schooling in the early 1920s. She then studied drama at the Royal Academy of Dramatic Art (RADA) and the Royal Academy of Music in London where she won scholarships. In addition, she studied architecture, textile and decor design and apprenticed under Elizabeth Arden.
She married Indian producer and actor Himansu Rai in 1929. Together they starred in Karma the first Hindi sound film. They soon founded Bombay Talkies whose films challenged the caste system.
Achhut Kanya (1936), her most notable film, told the story of a relationship between an untouchable and a Brahman
After becoming a widow in 1940, she was married to Russian painter Svetoslav Roerich in 1945.
In 1958, the President of India honoured Devika with a "Padma Shri". In 1970, she became the first recipient of the prestigious film prize Dadasaheb Phalke Award. At her funeral Devika was given full state honours.