Buddhist influences are evident in the culture of Nepal because Buddha was born in Nepal.It has strong Buddhist background and has played role in spread of Buddhism to Tibet. Nepalese princess Bhrikuti played a significant role in development of Buddhism in Tibet and Far East. Tibetan Buddhist architecture has long been influenced by Nepalese artists and sculptors like Araniko. The sacred Buddhist texts in Mahayana Buddhism are mainly written in Ranjana script (the script of Newars) or scripts like Lantsa which are derived from Ranjana.

Among the Tibeto-Burman tribes, Tibetan Buddhism is the most widely practiced form. Newar practice Newar variant of Vajrayana Buddhism and Theravada Buddhism. Many Buddhist groups are also influenced by Hinduism.

Buddhism is the dominant religion of the thinly-populated northern areas, which are inhabited by Tibetan-related peoples, namely the Sherpa, Lopa, Manangi, Thakali, Lhomi, Dolpa and Nyimba. They constitute a small minority of the country's population.

Ethnic groups that live in central Nepal, such as Gurung, Lepcha, Tamang, Magar, Newar, Yakkha, Thami and Chepang, are also followers of Buddhism. These ethnic groups have larger populations compared to their northern neighbours. They came under the influence of Hinduism due to their close contacts with the Hindu castes. In turn, many of them eventually adopted Hinduism and have been largely integrated into the caste system.

The Kirant tribes, especially the Limbu and the Rai, have also adopted Tibetan Buddhist practices from their Buddhist neighbours. The Jirel, which is considered a Kirata tribe, have also adopted Tibetan Buddhism.