Nepal is governed as a federal democratic republic after the adoption of the 2015 Constitution, ending a decade-long civil war and the abolition of the monarchy. The mental health sector has been under slow and steady development for decades. The vulnerable prison population of Nepal faces mental health challenges, from high prevalence to limited access to services. Though legal provisions are there for people with mental disorders, lack of implementation has affected a large group of patients. Forensic psychiatry as a subspecialty has not been recognized, and there is a challenge in this sector in terms of workforce, services, and research. In this chapter, we aim to discuss the historical aspects, epidemiology, current scenario, and challenges with way-outs in the field of forensic psychiatry and prison mental health.