Introductory sections to this study (carried out in 2 village panchayats near Kathmandu) provide general information on household energy consumption (i.e. fuelwood consumption patterns, economic costs, and the impacts of fuel pricing policies) and the use of improved stoves (effectiveness, distribution, and problem areas for adoption) in Nepal. Next, findings are presented on socioeconomic characteristics of the study populations, the number and type of stoves used, the time required to cook, construction costs, adverse health effects of the stoves and taboos on their use, and reasons for abandoning stoves. Linkages between fuelwood consumption and ethnicity, literacy, labour use, occupation, income, and size of household are analysed by tabular and multiple regression techniques, and findings on the extent of consumption relative to other fuels, fuelwood source, and purpose of fuelwood consumption are presented. There are 2 main conclusions: (1) while improved stoves could help reduce fuelwood consumption, their use has been minimal in the study area, due mostly to inadequate training of householders in use of the stoves, design defects, and improper location in the kitchen; (2) the lack of subsidiary occupations is the main cause of the rapid deforestation of the study area.