Cattle manure, human excreta and agriculture residues are used in anaerobic bioreactors in many parts of the world to produce methane gas, which is used for the purpose of cooking and lighting. Since such waste materials are readily available in farms, rural people of many developing countries have been benefited from this technology. Besides, this technology is cheaper and simpler, thus, gaining popularity throughout the world. Nepal is one of the least developed countries with the vast majority of people involved in subsistence agriculture. The use of biogas technology in Nepal has benefited the country in improving health, environment, economy and energy conservation. In this paper, we present the state of the biogas sector in Nepal