Background: The coronavirus disease 2019 (COVID-19) pandemic has caused massive disruption affecting the lives of billions of people worldwide. Vaccine hesitancy remains a barrier in the fight against COVID-19. The main objective was to assess COVID-19 vaccine hesitancy rate and its associated factors among the Nepalese people. Methods: A cross-sectional study design was used to collect quantitative data from all seven provinces. A total of 728 community people aged ≥18 years were surveyed to gather information. Bivariate and multivariate analyses were performed. Results: More than half of respondents (56%) were females whereas 34% belonged to age group 25-34 years. More than half of respondents (52%) lost their family income due to COVID-19. Overall, a fifth of the Nepalese people (19.6%) have COVID-19 vaccine hesitancy. The main reasons were fear of side effects (62%) and doubt on vaccine efficacy (50%). Bivariate analysis showed a significant association of vaccine hesitancy with province, age group, religion, ethnicity, level of education and source of family income. Furthermore, multivariate analysis shows that respondents from province 2 were about three times (aOR=2.9, 95% CI=1.2-6.9) more likely to show vaccine hesitancy than respondents from province 1. Likewise, respondents who were Muslim were eight times (aOR=7.9, 95% CI= 1.28 -48), and respondents who were from a marginalized ethnic group were three times (aOR=2.5, 95% CI=1.3-5) more likely to show hesitancy. Those respondents who had completed basic education (aOR=0.3, 95% CI=0.16-0.59) and secondary (aOR=0.36, 95% CI=0.17-0.8) and above were less likely to show vaccine hesitancy than those who were illiterate. Conclusions: The prevalence of COVID-19 vaccine hesitancy was high in Nepal. This hesitancy is driven by the peoples attitude towards the health system and vaccine. There is a need to increase the advocacy and awareness of the COVID-19 vaccine to eliminate the hesitancy and increase the vaccine acceptance rate.