Resource conflicts are an inevitable part of Nepalese society. Their causes include hierarchical and patron-client social relations, the incompatibility of formal laws, conflicts of interest, perception and belief, competition over scarce resources, ambiguity over roles and responsibilities, the unwillingness of the state to respond to social, economic, political and technological changes, corruption, and bad governance. The present study analyses resource conflicts and practices used to resolve them in Nepal. It was conducted in 6 districts of Nepal, representing the mountain, hill and terai regions, using focus groups and informal discussions, semi-structured and key informant interviews, observation, life histories, and a questionnaire survey. It concludes that existing, legally engineered formal conflict resolution systems are administratively complicated, expensive, elitist, heavily influenced by money and power, non-transparent, and inaccessible to the poor, and are therefore hardly adequate to address growing conflicts in Nepal. Likewise, informal systems are also distorted and inherently biased towards those with power. Hence, modernization of existing formal conflict resolution systems is urgently needed in Nepal.