Over the past few years, Nepal has become increasingly involved in international efforts to mitigate climate change through an emerging global mechanism called reducing emissions from deforestation and forest degradation, and enhancing forest carbon stocks in developing countries (REDD+). This Discussion Paper examines the interactions among diverse institutions and actors involved in Nepal’s REDD+ readiness process at multiple scales. Drawing on the concepts of ‘institutional interplay’(Young 2002b),‘cross-scale institutional linkages’(Berkes 2002), and ‘institutional design’(Ostrom 2005), it analyzes how the REDD+ readiness process and its emerging institutional architecture are influenced by international negotiations and funding mechanisms, interplay among national institutions of forest governance, and the interactions of various national actors. This analysis reveals that Nepal’s REDD+ architecture is being heavily shaped by imperatives and ambiguities in the international negotiations and funding mechanisms, and by the interplay and interactions of national institutions and stakeholders representing the Government of Nepal, civil society organizations, donors and private consultants, with strong implications for sub-national interactions and decentralized forest governance. Based on this analysis and reflection, we identify key challenges and considerations for realizing inclusive stakeholder engagement and suggest ways forward for the effective, equitable and transparent implementation of REDD+ in Nepal.