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Background In Nepal, 54% of women have an unmet need for family planning within the 2 years following a birth. Provision of a long-acting and reversible contraceptive method at the time of birth in health facilities could improve access to postpartum family planning for women who want to space or limit their births. This paper examines the impact of an intervention that introduced postpartum contraceptive counseling in antenatal care and immediate postpartum intra-uterine device (PPIUD) insertion services following institutional delivery, with the intent to eventually integrate PPIUD counseling and insertion services as part of routine maternity care in Nepal. Methods This study took place in six large tertiary hospitals. All women who gave birth in these hospitals in the 18-month period between September 2015 and March 2017 were asked to participate. A total of 75,587 women (99.6% consent rate) gave consent to be interviewed while in postnatal ward after delivery and before discharge from hospital. We use a stepped-wedge cluster randomized design with randomization of the intervention timing at the hospital level. The baseline data collection began prior to the intervention in all hospitals and the intervention was introduced into the hospitals in two steps, with first group of three hospitals implementing the intervention 3 months after the baseline had begun, and second group of three hospitals implementing the intervention 9 months after the baseline had begun. We estimate the overall effect using a linear regression with a wild bootstrap to estimate valid standard errors given the cluster randomized design. We also estimate the effect of being counseled on PPIUD uptake. Results Our Intent-to-Treat analysis shows that being exposed to the intervention increased PPIUD counseling among women by 25 percentage points (pp) [95% CI: 14–40 pp], and PPIUD uptake by four percentage points [95% CI: 3–6 pp]. Our adherence-adjusted estimate shows that, on average, being counseled due to the intervention increased PPIUD uptake by about 17 percentage points [95% CI: 14–40 pp]. Conclusions The intervention increased PPIUD counseling rates and PPIUD uptake among women in the six study hospitals. If counseling had covered all women in the sample, PPIUD uptake would have been higher. Our results suggest that providing high quality counseling and insertion services generates higher demand for PPIUD services and could reduce unmet need. Trial registration Trial registered on March 11, 2016 with ClinicalTrials.gov, NCT02718222 .