The bark of Daphne bholua Ham. ex D.Don, locally called Lokta, has been used traditionally for preparing Nepali handmade paper and it is an important non-timber forest product (NTFP) for the economic development of the mountain people in the Nepal Himalaya. Though it occurs naturally in Bhujung area of the Annapurna Conservation Area (ACA) of Nepal, the locals have not used it for making paper. In the context of increasing demand of Nepali handmade paper in the international market, there is a good prospect of income generation by sustainable harvesting of this resource in Bhujung area. This study is an attempt to estimate the present stock of Daphne bholua, the potential yield of its bark and the population status in Surno Kharka and Wijung Ban of the study area. The mean density of D. bholua was 5231 and 6925 stem/ha in Surno Kharka and Wijung Ban, respectively, and the harvestable dry inner bark mass was 288 and 391 kg/ha, respectively. Regeneration was low due to anthropogenic disturbances like livestock grazing and trampling, and the unsuitable microhabitats such as high litter accumulation and dense canopy. The site with low biotic disturbance, presence of tree fall gaps with relatively low litter accumulation and the acidic soil is a suitable natural habitat for the growth of D. bholua.