Hydari began her career as a Bharatanatyam dancer, having become interested in the art form following her association with Leela Samson from the age of 11. She worked as a part of Samson's dance group, Spanda, teaching students and travelling through India and abroad to perform in stage events.

Her first film to have a theatrical release, however, was the Malayalam film Prajapathi (2006), in which she starred alongside Mammootty. She had been recommended to director Ranjith for the role by actress Suhasini, and was selected after the director managed to get in contact with her through Madhu Ambat, who was the cinematographer of Sringaram.

In 2011, Hydari appeared in a role opposite Arunoday Singh in Sudhir Mishra's romantic drama Yeh Saali Zindagi. Portraying the wife of a former convict, the film garnered publicity prior to release for the sensuous scenes between Hydari and Singh. Post-release, Hydari received acclaim for her performance by winning the Screen Award for Best Supporting Actress and subsequently received much larger public attention. She later portrayed a supporting role alongside Ranbir Kapoor in Imtiaz Ali's Rockstar (2011). Hydari initially had met Ali to discuss the leading female role of a Kashmiri girl, but he chose to cast newcomer Nargis Fakhri instead. Ali subsequently contacted her again after two months and signed her to play a supporting role of an impulsive television reporter, who follows the character played by Kapoor.

n 2016, Hydari starred alongside Amitabh Bachchan and Farhan Akhtar in Bejoy Nambiar's crime thriller film Wazir.The film tells the story of two unusual friends, a chess grandmaster who uses a wheelchair, played by Bachchan, and a grief-stricken ATS officer, played by Akhtar. Hydari played the love interest of Akhtar's character. The film released on 8 January 2016 to mostly positive reviews and had the box office collection of around ₹62 crore (US$8.7 million). Hydari also garnered praise for her performance. Gayatri Gauri in her review for Firstpost called Hydari's performance a "welcome change from glamorous heroines we usually see on screen."[54] Abhijit Bhaduri of The Times of India said that despite the lack of focus on her character, she did justice to her part by "conveying stuff with her eyes." Ananya Bhattacharya of India Today gave Hydari the highest praise saying that she "brings vulnerability to her Ruhana" added that she "has to her credit several strong sequences.

Hydari is set to star in Sudhir Mishra's political thriller film Daas Dev, which is an adaptation of Sarat Chandra Chattopadhyay's 1917 novel Devdas. She will be seen essaying the part of Chandramukhi in the film opposite Rahul Bhat.