Global climate change is increasingly affecting the distribution, growth, and chemical composition of medicinal plants, posing severe threats to conservation and sustainable use. In Nepal, which is both a country with rich biodiversity and rich traditional knowledge, medicinal plants make significant contributions to local healthcare systems and national economies. However, rising temperatures, altered precipitation patterns, and elevated rates of extreme weather occurrences are disrupting essential natural habitats and threatening the genetic integrity and phytochemical contents of many significant medicinal plants, which undermines the efficacy and quality of herbal drugs for traditional applications and new phytopharmaceutical uses. This review examines the impact of climate change on phytochemical and genetic variation of medicinal plants in Nepal, identifying vulnerable species, ecological transformation, and adaptation mechanisms. Emphasis is placed on integrating conservation efforts that harmonize traditional practices, scientific research, and climate-resilient cultivation techniques in an effort to protect Nepal’s valuable medicinal plant diversity against climate change.