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This report provides an overview of Nepal’s initiatives on readiness for Reducing Emissions from Deforestation and forest Degradation (REDD+). It presents the status of forest cover change; identifies the drivers of deforestation, institutional and distributional factors in the country; analyses the political economy of land use change; revisits the REDD+ process; and assesses prospects for effective, efficient and equitable outcomes of the same. Nepal has a high rate of deforestation and forest degradation, though there exists no robust, comprehensive orupdated information to show the precise rate. Multiple drivers—such as high dependency on forests, over harvesting, weak governance, landlessness and high opportunity costs for agricultural expansion—contribute to deforestation. The government’s capacity to monitor and address these drivers and underlying causes appears inadequate. Forest officials, civil society organisations and donors exhibit strong enthusiasm for and active involvement in REDD+. Over half a dozen diverse REDD+ readiness initiatives are being implemented by the government and non-state actors. REDD+ implementation has adopted a participatory and multi-stakeholder process usually involving government agencies, civil society organisations and development partners. However, this process is largely detached from the complex dynamics of deforestation and appears to be limited to technical, administrative and peripheral issues. The core issues of forest tenure security and governance reform have not received adequate attention. A robust policy, legal and institutional foundation for community forestry and well-functioning community institutions provide a strong foundation for REDD implementation in Nepal. However, there are enormous challenges from the larger political and socio-economic context, the paucity and diversity of institutional arrangements and the unique nature and distribution of forest types.