Born in Bucharest, Lara is the only child of Valentin Plătăreanu, a Bucharest actor, and his wife, Doina, a homemaker. When she was four (in 1983) her family decided to flee to West Germany to escape Nicolae Ceauşescu's regime in Communist Romania. Although the family had originally planned to emigrate to Canada, they settled down in Freiburg im Breisgau, Baden-Württemberg, before eventually moving to Berlin.

After graduating at the Französisches Gymnasium Berlin in 1997, Lara went on studying acting under the management of her father, co-founder of the Theaterwerkstatt Charlottenburg, until 2000.

By age sixteen she was already playing lead roles in various television dramas. Since then her career has developed and she has become a respected film actress.

Her most famous role to date, which has resulted in international recognition, is as Traudl Junge, Adolf Hitler's secretary, in the Oscar-nominated 2004 film Der Untergang (Downfall).

Due to her convincing performance in Der Untergang, Francis Ford Coppola wrote her a letter and gave her a leading role in Youth Without Youth (2007).

In 2007 she also appeared as journalist Annik Honoré in the film Control, the Ian Curtis biopic. In 2008, she served as a member of the Cannes Film Festival jury.

She played a lead role in Greek director Theo Angelopoulos's 2008 film The Dust of Time, opposite Irène Jacob and Bruno Ganz.

More recently, she appeared in The Reader and Der Baader Meinhof Komplex which were both nominated for the 81st Academy Awards (best picture and best foreign language film, respectively).

She married 2009 the actor Sam Riley with whom she acted in the movie Control.