He made his directorial debut with the film Manzilein Aur Bhi Hain in 1974. He came to limelight after the release of film Arth in 1982. Bhatt’s musical romantic film Aashiqui which released in 1990 was a huge hit and sound track of this film are even popular today. Following year in 1991, he launched his daughter Pooja Bhatt in a lead role opposite Aamir Khan in Dil Hain Ki Manta Nahin. The very same year he directed the fil Saathi and was one of the biggest hit of 1992. He was at the peak of his career during 1990s and gave several other hits like Sir, Hum Hain Rahi Pyar Ke, Naajayaz, Criminal and Zakhm to name a few.
After release of his film Kartoos in 1999 he decided to retire from director and took up screenwriting. He wrote screenplay for many hit films like Raaz, Dushman, Murder, Who Lamhe and Gangster amongst others. He is also a notable producer and his production house Vishesh Films has produced several films. His first produced film was Papa Kehte Hai in 1996. From mid-2000 till now he has produced several films under his banner such as: Saaya, Footpath, Tum Mile and Humari Adhuri Kahani to name a few.
Bhatt first married Lorraine Bright when he was just 20 years old. The couple together has two children a son Rahul Bhatt and a daughter Pooja Bhatt. The marriage ended after Mahesh Bhatt fell in love with Parveen Babi. The love affair ended soon and Bhatt married Soni Razdan in 1986 with whom he has two daughters, Alia Bhatt and Shahenn Bhatt.