Background: Sexual dysfunction in female with depressive disorder is highly prevalent and strikingly understudied. Epidemiological and clinical studies have shown association between depression and impairments of sexual function. Despite high prevalence, there are limited studies regarding the prevalence of sexual dysfunction among female with depressive disorder in Nepal. Aims: This study was conducted to find out the prevalence of sexual dysfunction in female with depressive disorder in Nepal, their association with treatment status, and the level of psychological distress caused by it. Methods: A descriptive cross-sectional study was carried out among female with depression at Tribhuvan University Teaching Hospital, Nepal. The participants were grouped as drug naïve and under medication. Data were collected using semi-structured proforma, Beck Depression Inventory, Kessler 6+ Psychological Distress Scale, and Female Sexual Function Index. Data were tabulated and analyzed using Statistical Package for Social Sciences version 23. Results: The prevalence of sexual dysfunction was 58.82%, being 60.78% in drug-naïve cases and 56.86% in females suffering from depression and receiving medications. This study showed statistically significant association between sexual dysfunction and psychological distress but not with age, duration of marriage, number of children, occupational, and financial status. Conclusions: The study reported high prevalence of sexual dysfunction among female with depression. All domains of sexual function were affected and showed significant association with psychological distress. Therefore, assessment of sexual dysfunction in every female with depression is required to address the problem timely and efficiently.