This paper looks at Nepal'sMillennium Development Goals (MDG) with respect to healthand education. The paper is organized with part one dealingwith education and is divided into three sections: section Adetails the current state of Nepal's MDG indicators andanalyzes progress towards the goals; section B describes thepolicies that have contributed to Nepal's success, andpolicies that constrain its future achievements; and thefinal section C outlines the challenges facing Nepal inachieving the education MDGs. Part two of the paper dealswith goals in health. This part of the paper also is dividedinto three sections with section A detailing healthoutcomes, progress and prospects; section B discusses thefactors explaining progress in health and outcomes; andsection C gives challenges for the future.