Climate-smart agriculture (CSA) is an innovation that calls for integrating agricultural development with climate resilience. In Nepal, the agricultural sector is significant for the country to achieve economic stability and food security; however, it has been suffering from adverse impacts of climate change and has most severely affected the smallholder farmers due to their limited adaptive capacity. This paper highlights the different practices of CSA already implemented in Nepal and their importance in addressing such challenges, improving agricultural productivity, resilience, and sustainability, and contributing to reduced GHG emissions. Key strategies include adopting drought-resistant crops, efficient water-use technologies, integrated nutrient management, renewable energy solutions, and agroforestry. However, fragmented institutional frameworks, and insufficient stakeholder coordination, hinder CSA adoption in Nepal and a lack of evidence-based knowledge tailored to local needs. The Climate-Smart Village (CSV) model demonstrates promise, utilizing participatory action research and community engagement to create localized solutions. Despite these challenges, CSA has immense potential to reduce climate risks, bolster food security, and promote long-term agricultural sustainability. Achieving these outcomes requires targeted interventions, enhanced policy support, and collaboration among government, private, and non-governmental sectors. By addressing these barriers, CSA can transform Nepal’s agricultural systems, ensuring resilience and sustainability for future generations while advancing national and global development goals.