Dileep was born in Aluva, Ernakulam district, Kerala. He studied at S.N.V. Sadanam School and Vidyadhiraja Vidya Bhavan High School, then joined Aluva U.C. College, and then transferred to Maharaja’s College in Ernakulam. His talent for acting was not known in school and college, where he rarely won any accolades or merits. During 1985–1987 he tried to perform as a mimicry artist at UC College but was not successful. On joining Maharaja’s College for a B.A. in History in 1989, Dileep started to take mimicry seriously. Mimicry was only getting its roots in Kerala at the time. Dileep gained fame in mimicry by imitating Mohanlal and Innocent. He gained entry into Malayalam cinema through actor Jayaram who recommended him to director Kamal to work as an assistant director. Dileep was very popular among the Keralites through the Onam based Comic albums De Maveli Kombathu, along with his friends Nadir Shah and Abi. Dileep married actress Manju Warrier on 20 October 1998 at the Aluva Srikrishna Temple. The couple have one daughter.

Dileep started his career as a mimicry artist in the Cochin Kalabhavan troupe. He also played a lead role in Asianet’s hit comedy program Comicola. Later he got a chance to be the assistant director to Kamal. While being an assistant director, Dileep did some small roles, debuting with just a small scene in Kamal’s Ennodu Ishtam Koodaamo (1992). He was then brought up by actor Jayaram. He recommended his name to many directors. The film Manathe Kottaram (1994), directed by Sunil, gave him the first break and his screen name Dileep came into place through the character of the same name that he played.

By the mid-90s he started getting more prominent roles. He played a supporting role in Sathyan Anthikkad’s Thooval Kottaram (1996) starring Jayaram and Manju Warrier in the lead. He also did another supporting role in the Jayaram-starring film Swapna Lokathe Balabhaskaran (1996). The film Sallapam (1996) was a turning point in his career; with the commercial success of the film he started becoming noted as an actor. It was playing Unnikrishnan in Rafi-Meccartin’s Punjabi House that made him popular as a comic actor. A major commercial success was Rafi-Meccartin’s Thenkasipattanam. A. K. Lohithadas’s Joker also did very well. With the commercial success of such comedy-melodramas, Sibi Malayil’s Ishtam, Aku Akbar and Aby Jose’s Mazhathullikkilukkam, and Sasi Shankar’s Kunjikkoonan, Dileep had established himself as a commercially viable actor. He won the Kerala State Film Special Jury Award for playing Kunjan in Kunjikkoonan. It was playing Madhavan in Lal Jose’s Meesa Madhavan that made a star out of Dileep. It was quite different from his usual slapstick roles. During 2000-2002 period most of the malayalam films were failing at the box office and malayalam film industry seemed to be in a declined phase. Meesa Madhavan was the first blockbuster during that period. Dileep was the man who gave rebirth to malayalam film industry. His comic timing and dialogue delivery in films made him popular among Malayali audiences, though there was criticism from certain quarters that he had been typecast in slapstick comic roles. His role as an effeminate man from a family of fishermen in Lal Jose’s Chanthupottu won him the Special Jury Award at the Kerala State Film Awards.

Dileep produced Joshi’s Twenty:20, which is considered to be the highest-grossing film in Malayalam cinema. In the year 2009, he had a good start. In the beginning of 2010 Dileep joined a couple of veterans in Malayalam film: Sidhique and Kamal. The first one, Bodyguard, directed by Siddique, was a critical and commercial success. He was praised for his performance as Jayakrishnan. His next film, Aagathan, directed by Kamal, was also a critical and commercial success. Pappy Appacha, a Mammas film, became the sixth highest grosser of 2010.

Dileep was chosen as the No. 1 actor by Sify in 2010 because most of his films were superhits.