Background: Preterm birth is a worldwide epidemic and a leading cause of neonatal mortality. In this study, we aimed to evaluate the incidence, risk factors and consequences of preterm birth in Nepal. Methods: This was an observational study conducted in 12 public hospitals of Nepal. All the babies born during the study period were included in the study. Babies born <37 weeks of gestation were classified as preterm births. For the association and outcomes for preterm birth, univariate followed by multiple regression analysis was conducted. Results: The incidence of preterm was found to be 93 per 1000 live births. Mothers with age less than 20 years (aOR 1.21; 1.09-1.34) and 35 years and above (aOR 1.30; 1.05-1.63) had a high risk for preterm birth. Similarly, education of the mother was a significant predictor for preterm birth: illiterate mothers (aOR 1.90; 1.66-2.19), literate mothers (aOR 1.48; 1.33-1.65) and mothers having basic level of education (aOR 1.25; 1.14-1.38). Socio-demographic factors such as smoking (aOR 2.02; .84-2.22) and use of polluted fuel (aOR 1.38; 1.28-1.50); obstetric factors such as nulliparity (aOR 1.44; 1.28-1.61), multiple delivery (aOR 1.92; 1.33-2.76), severe anemia during pregnancy (aOR 2.43; 1.55-3.82), antenatal visit during second trimester (aOR 1.10; 1.02-1.19) and third trimester (aOR 1.44; 1.30-1.60) were found to be significant risk factors of preterm birth. Preterm has a risk for pre-discharge mortality (10.60; 9.28-12.10). Conclusion: In this study, we found high incidence of preterm birth. Various socio-demographic, obstetric and neonatal risk factors were associated with preterm birth. Risk factor modifications and timely interventions will help in the reduction of preterm births and associated mortalities.