Nepal’s diverse landscape is presenting various forest management challenges, and the country has experienced significant forest lost over the years. Therefore, achieving sustainable forest management in the country is a major need to be addressed if national level REDD processes are to yield any benefits for Nepal. With support from PROFOR (Program on Forests), the World Bank conducted an analysis of the forest sector in Nepal, providing policy priorities and recommendations to the Ministry of Forestry and Soil Conservation and other audiences, to improve mechanisms for resource mobilization in forestry, incentives, and governance. The study outlines key priorities for Nepal’s forestry sector, including community-based approaches, multistakeholder land-use planning, and to improve forest administration’s governance scheme.