Diversity and regeneration of tree species were studied in two community-managed Sal forests, Bhabar lowland (LEF) and Hill (HEF), in the central region of Nepal. Tree species >30 cm in height were enumerated in 16 systematically laid quadrats. Density, dominance and frequency as well as the Importance Value Index (IVI) of species were computed to characterize the floristic composition. Stand density, basal area, and diversity measures were calculated to examine stand structure and heterogeneity in each forest community. A total of 17 families, 19 genera and 21 species were represented in the LEF. In the HEF, the number of families, genera and species recorded was 13, 18 and 21, respectively. Results showed Shorea robusta as the single most abundant species in both LEF (IVI = 174.4%) and HEF (IVI = 206.9%). A clear site-specific association of Shorea robusta, Schima wallichi and Syzygium operculatum in LEF and Shorea robusta, Pinus roxburghii and Eugenia jambolana in HEF were found. The stand density and basal area in the LEF (13,231 stems ha-1, 34.30 m2 ha-1) was higher than in the HEF (7 787 stems ha-1, 20.69 m2 ha-1). Both Shannon-Weiner and Simpson?s indices identified the HEF (H’= 2.42, 1-D = 0.64) as more diverse than the LEF (H’= 1.38, 1 D = 0.35). The overall regeneration status of both Sal forests was satisfactory, as 38% and 33% of the total species in the LEF and HEF, respectively, were represented in both seedling and advance regeneration stages. In conclusion, variations in species composition, diversity and regeneration status between the forests studied is partly explained by their altitude.