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The Himalaya region of Nepal encompasses significant habitats for several endangered species, among them the brown bear (Ursus arctos pruinosus). However, owing to the remoteness of the region and a dearth of research, knowledge on the conservation status, habitat and population size of this species is lacking. Our aim in this paper is to report a habitat survey designed to assess the distribution and habitat characteristics of the brown bear in the Nepalese Himalaya, and to summarize a conservation action plan for the species devised at a pair of recent workshops held in Nepal. Results of our survey showed that brown bear were potentially distributed between 3800 m and 5500 m in the high mountainous region of Nepal, across an area of 4037 km2 between the eastern border of Shey Phoksundo National Park (SPNP) and the Manasalu Conservation Area (MCA). Of that area, 2066 km2 lie inside the protected area (350 km2 in the MCA; 1716 km2 in the Annapurna Conservation Area) and 48% (1917 km2) lies outside the protected area in the Dolpa district. Furthermore, 37% of brown bear habitat also forms a potential habitat for blue sheep (or bharal, Pseudois nayaur), and 17% of these habitats is used by livestock, suggesting a significant potential for resource competition. Several plant species continue to be uprooted by local people for fuel wood. Based on the results of our field survey combined with consultations with local communities and scientists, we propose that government and non-government organizations should implement a three-stage program of conservation activities for the brown bear. This program should: (a) Detail research activities in and outside the protected area of Nepal; (b) support livelihood and conservation awareness at local and national levels; and (c) strengthen local capacity and reduce human-wildlife conflict in the region.