The global burden of tuberculosis (TB), particularly with multidrug resistance (MDR), is escalating and has become a major health challenge. It is well known that acid-fast bacilli (AFB) smear-negative TB patients are the major source of spreading TB to healthy individuals when left untreated. Early diagnosis of TB and rapid detection of drug resistance are important for the proper management of drug-resistant TB (DR-TB). Therefore, a laboratory based cross-sectional study was conducted from July to December 2019 at the National Tuberculosis Centre, Thimi, Nepal, with the objective of evaluating the diagnostic performance of Xpert MTB/RIF assay, Mycobacterium tuberculosis (MTB) culture and line probe assay (LPA) for the detection of MDR-TB in AFB smear-negative sputum samples. We evaluated a total of 222 AFB smear-negative sputum specimens, of which 21.6% (n = 48) showed MTB positive with Xpert MTB/RIF assay and, while culturing on Lowenstein–Jensen (LJ) media, 21.2% (n = 47) were MTB culture positive. The sensitivity, specificity, PPV and NPV at 95% confidence interval of Xpert MTB/RIF assay on diagnosing M. tuberculosis from smear-negative specimens were 73% (57–84), 92% (87–96), 71% (59–81) and 93% (89–95), respectively. In addition, the sensitivity of Xpert MTB/RIF assay and LPA in detecting rifampicin resistance was 75% (42–94, 95% CI) and 91.67% (62–99, 95% CI), respectively. The current study also assessed a significant association between the occurrence of pulmonary tuberculosis with different age group, TB history and alcohol consumption. These findings indicate that Xpert MTB/RIF assay and LPA are appropriate methods for early detection and accurate diagnosis of TB and RIF mono-resistant cases.