Lakshmi was married three times. Her first marriage was to Bhaskar, which was arranged by her parents when she was seventeen. Her only biological child, Aishwarya, was born in 1971. Her marriage ended in a divorce, and she gained custody of her daughter, who later became an actress in the 1990s, making her a fourth generation actress. Lakshmi fell in love with her Chattakari leading man Mohan, but that relationship ended. While she was shooting En Uyir Kannamma, she and actor-director Sivachandran fell in love and got married.
Her daughter Aishwarya, gave birth to a baby girl in the mid 1990s, making Lakshmi a real-life grandmother. Lakshmi adopted a baby girl in 2001.