Background. Lockdown is recognized as an effective measure in limiting the spread of coronavirus (COVID-19) throughout the world. However, recurrent COVID-19 infection and the extension of lockdown have threatened the livelihoods of people, mainly socioeconomic and mental health dimensions. Objective. The present study is aimed at identifying the impact of COVID-19 lockdown on the daily life and mental health of the general population of Nepal. Furthermore, the study identified the predictors of the mental health status of the people during COVID-19 lockdown. Methods. The study was conducted among 354 Nepalese people specifically the breadwinner of the family. Respondents completed the questionnaires related to the sociodemographic characteristics, COVID-19, and its impact on various aspects of life, including mental health via Depression, Anxiety, and Stress Scale-21 items (DASS-21). Data was collected through the web-based method, Google Forms questionnaire. Respondents were contacted through email and social networks (Facebook, Messenger, WhatsApp, and Viber) following a snowball approach. Data was analyzed using descriptive and inferential statistics. Logistic regression analysis was done to identify significant demographic, COVID-related, and socioeconomic factors associated with mental health outcomes. Results. Based on DASS-21 scores, the prevalence of depression, anxiety, and stress was 46.6% (mild: 22.3%, moderate: 16.7%, severe: 6.5%, and extremely severe: 1.1), 42.1% (mild: 10.2%, moderate: 18.6%, severe: 11.6%, and extremely severe: 1.7%), and 39% (mild: 16.7%, moderate: 12.7%, and severe: 9.6%), respectively. Various factors associated with COVID-19, its lockdown measures, and sociodemographic characteristics of the people were identified as the significant predictors of depression, anxiety, and stress among the general population of Nepal. Conclusion. The impact of COVID-19 lockdown on individuals’ work, income, education, living standard, lifestyle, and consequently mental health is significant. The study findings warrant the importance of understanding the impact of the COVID-19 pandemic on individuals’ all aspects of life and timely monitoring and appropriate intervention on risk groups to reduce the severity and chronicity of mental health problems.