The study documents plant species used as Non-Timber Forest Products (NTFPs) and traditional knowledge on the utilization of these plant resources by local people around the Community Forests (CFs) in Kamere-Karchape and Madhuban of Arghakhanchi and Kapilvastu districts of Nepal between July and September in 2005. 41 households were taken as the sample size from both of the CFs and a variety of ethnobotanical and anthropological methods were applied; semi-structured interviews with traditional healers and elderly persons of the user groups, community forest maps, participatory observation and photography. A total of 103 plant species have been identified from both of the community forests. All identified plant species have medicinal properties alone with other uses. Most of them have medicinal properties in their bark, root and fruits. A large number of these identified plant species are used for gastro-intestinal problems, rheumatisms, chest infection and fever and typhoid. Medicine from these plant parts is prepared in the form of juice, paste and powder usually prepared by elder female in the family. Elderly persons and traditional healers of the areas pose vast knowledge on ethnomedicinal practices along with various rituals in comparison of the young generation. The knowledge transformation system is quite restricted within the family. Users were found very aware in conservation of NTFP’s in their CFs and their interest are oriented towards NTFPs plant species which have high demand in market with high price and have multiple use value. Therefore, medicinal plants found in CFs are very important for curing diseases and ailments in remote areas where modern health facilities do not exist. It is not only essential to conserve such a wealth of information hidden among the local people but also to apply them to modern knowledge of science and technology to meet the ever increasing requirement of mankind.