Visceral leishmaniasis (VL) or Kala-azar is a potentially fatal vector-borne zoonotic disease caused by a protozoan parasite, Leishmania donovani. Nepal, together with India, Bangladesh, Brazil and Sudan constitutes the five countries of the world where more than 90% of VL occurs. In Nepal, the disease affects eastern Terai region which lies adjacent to the Bihar state of India. Although leishmaniasis is regarded as a significant health problem in Nepal by the Ministry of Health, there is no active case detection programme in the country. Information on the morbidity and mortality is thus very limited. The objectives of this study were to determine the up-to-date morbidity and mortality trend for VL in Nepal. Data collected from eight zonal hospitals in the Terai region suggests that the first confirmed case of VL was recorded in 1980. By 2003, the disease has spread to 14 districts of central and eastern regions of Nepal, and nearly six million people residing in these districts were at the risk of acquiring the disease. A total of 25890 cases with 599 deaths were reported during the year 1980-2006 (up to July). The case fatality rate (CFR) varied from 0.23% to 13.2%. District-wise analysis showed that, during 2003, highest incidence (per 100,000) was in Mahottari district (184), followed by Sarlahi (100) and Sunsari (96). The highest CFR was in Dhanusha (2.9%) followed by Bara (2.4%) and Saptari (2.0%). Majority (70.9%) of persons affected by VL were aged 15 years and above, followed by 10-14 years (13.9%), 5-9 years (11.9%) and 1-4 years (3.3%). The incidence of VL in Nepal seems to be increasing at a faster rate indicating that the existing control programs have been ineffective. To achieve success in control programs, the existing ones should be amended as there is evolution of resistance in the parasite as well as the vector. Public health education, to make the people aware about preventive aspects of the disease is important. The possibility of the existence of animal reservoirs should also be considered and checked out for better control measures.