Because of the influence of climate change and human activities, an in-depth analysis of land use/cover change (LUCC) and its drivers in Nepal is important for local community forestry management and sustainable development. This paper analyzed the direction, magnitude, and rate of LUCCs and their spatial aggregation, as well as landscape fragmentation in Nepal, from 1995 to 2020 using the ESA/CCI (European Space Agency Climate Change Initiative) dataset. A total of 10 factors including population, socioeconomic development, climate factors, and forest management factors were selected to determine the dominant driving factors affecting LUCC in Nepal by Principal component analysis (PCA) and linear regression analysis. Our study showed that climate change, human activities, and forest management (e.g., community forestry) all influenced LUCC. In Nepal, land use/cover shifted among forest, shrub, grassland, and cropland from 1995 to 2020, mainly from forest to cropland. The most significant LUCC in recent decades has been caused by the expansion of cropland and urbanization. The area of coniferous and broadleaf forests decreased from 1995 to 2001 due to deforestation and forest degradation, and recovered gradually after 2001, which was attributed to the successful practice of community forestry in Nepal. Accelerated urbanization was also found in Nepal, and the significant expansion of construction land came mainly came from cropland. Land fragmentation in Nepal was severe and exhibited spatial aggregation characteristics. Human activities played a greater role in LUCC in Nepal than climate factors. The community forestry, GDP growth, and precipitation were positive driving factors for increases in forest area, while the development of the services sector and rising temperature were negative driving factors.