Monisha was born in Panniyankara, Calicut in 1971 to Narayanan Unni and Sreedevi. She has a brother, Sajith. Her father, Narayanan Unni, hailed from Shornur and was in the leather business in Bangalore, Karnataka, where Monisha was brought up. Her mother, Sreedevi, was a dancer. Monisha started to learn dance during her childhood and soon became a danseuse. She did her first stage performance when she was 9. She won the Kaushika Award in the Karnataka state-level Bharatanatyam competition in 1985. She completed her schooling at St Charles High School, Bangalore and Bishop Cotton Girls School, Bangalore. She completed her degree in psychology at Mount Carmel College, Bangalore.
Noted Malayalam novelist M. T. Vasudevan Nair, who is also a screenwriter and film director, is a family friend of Monisha’s. He was responsible for her entry into films. She made a debut in film acting with Nakhakshathangal (1986), which was written by M.T. and directed by Hariharan. The film portrayed a love triangle involving three teenagers. Monisha was paired opposite another debutant Vineeth, who was to become a famous south Indian actor. Monisha’s portrayal of Gowri, the film’s female protagonist, won her the National Film Award for Best Actress in 1987. Monisha proved her performance in her first film was not a fluke with her performances in Perumthachan (1990), Kadavu (1991) and Kamaladalam (1992). She also acted in the Tamil films Pookkal Vidum Ithal (a remake of Nakhashathangal), Unna Nenachen Paatu Padichen, and Dravidan, and in the Kannada film Chiranjeevi Sudhakara (1988), pairing with Raghavendra Rajkumar in the lead roles.
Monisha was working on the Malayalam film Cheppadividya when she died. On 5 December 1992, a car carrying her and her mother met with an accident near Cherthala in Alappuzha. While her mother escaped with fractures and bruises, Monisha succumbed to severe brain damage and other injuries