Nepal has undergone enormous economic and political changes during the past two decades. Data suggest that these were accompanied by large and increasing economic inequality after the mid 1990s with income from house rental, employment, businesses and remittances as well as the stock of wealth in real estate and businesses constituting the leading sources. Considerable disparities existed by castes|ethnicities and spatial distinctions with upper caste Hindus and Newars and urban areas consolidating their command of resources. The deep-seated socio-cultural practices and changing political landscape appear to greatly affect the gulf between those with and without access to power. Copyright © 2009 John Wiley & Sons, Ltd.