Background The COVID-19 pandemic is posing unprecedented challenges and threats to the health care system, particularly affecting the effective delivery of essential health services in resource-poor countries such as Nepal. This study aims to explore community perceptions of COVID-19 and their experiences towards health services utilization during the pandemic in Province-2 of Nepal. MethodsThe semi-structured qualitative interviews were conducted among purposively selected participants (n=41) from a mix of rural and urban settings in all districts (n =8) in Province 2 of Nepal. Virtual interviews were conducted between July and August 2020 in local languages. The data were analyzed using thematic network analysis in NVivo 12 Pro. ResultsThe findings of this research are categorized into four global themes: i) Community and stakeholders’ perceptions towards COVID-19; ii) Impact of COVID-19 and lockdown on health services delivery; iii) Community perceptions and experiences of health services during COVID-19; and, iv) COVID-19: testing, isolation, and quarantine services. Most participants shared their experience of being worried and fearful about COVID-19 and reported a lack of awareness, misinformation, and stigma as major factors contributing to the spread of COVID-19. Maternity services, immunization, and supply of essential medicine were found to be the most affected areas of health care delivery during the lockdown. Participants reported that the interruptions of health services were mostly due to the closure of health services at local health facilities, limited involvement of private health sectors during the pandemic, fears of COVID-19 transmission among health workers and within health centers, and disruption of transportation services. In addition, the participants expressed frustrations on poor testing, isolation, and quarantine services related to COVID-19, and poor accountability from governments at all levels towards health services management during the COVID-19 pandemic. ConclusionsThis study found that essential health services were severely affected during the COVID-19 pandemic in all districts of Province-2. It is essential to expand the service coverage and its quality in addition to increasing public-private sector engagement to ensure the essential health services are utilized by the population.