This study examines the impact of nonperforming loan on the profitability of Nepalese commercial banking sector. Further, other bank specific factors are also taken into consideration. More specifically, nonperforming loan to total loan, loan loss provision, total loan to deposit ratio, interest income to total loan, capital adequacy ratio and bank size are the associate variables, whereas, return on assets and return on equity have been taken as the proxies of bank’s profitability. An unbalanced data set collected from secondary sources comprising 13 commercial banks of Nepal over the period of 2069/70 B.S to 2078/79 B.S have been employed for the purpose of analysis. Conclusions have been drawn using Pooled OLS model, random effect model and fixed effect model as a regression model after testing their appropriateness using Breusch-pagan test and Hausman test. According to the findings from the study it is observed that nonperforming loan ratio has negative and statistically significant impact on both return on asset and return on equity. Loan loss provision has negative but insignificant impact on banks profitability (ROA and ROE). Interest income to total loan ratio have positive and significant impact on ROA whereas insignificant impact on ROE however positive. Total loan to deposit ratio-have significant positive impact on ROA whereas negative impact on ROE. Bank size have negative and statistically significant impact on both ROA and ROE. CAR have insignificant impact on ROA whereas significant impact on ROE. From the study nonperforming loan ratio have been found as the major detractor of the Nepalese commercial bank’s profitability since it carries the most negative coefficient which is highly significant as well. This implies that the burning issue of rise in NPL can be attributed to decline in the Nepalese bank’s profits.