In June 1984, three U.S. experts conducted an in-country study of Nepal's small and medium scale irrigation sector and assessed its needs for assistance. The team's key conclusions, presented herein, are: (1) Irrigation water management is the most neglected aspect of Nepal's water development; priority should be given to improving O&M in government-operated systems and a special O&M unit should be established. (2) Efforts to increase irrigation water supply should focus on capturing lesser tributary streams and on developing shallow groundwater for use in conjunction with existing surface supplies. (3) Community involvement (some 80% of irrigation in Nepal is farmer developed and operated) should be preserved; government assistance to farmer-managed systems should be limited to improvements that are beyond farmers' technical or financial capacity. (4) Technical assistance should promote institution building as much as irrigation development. (5) Rapid appraisal studies of existing systems and an institutional analysis of the irrigation sector should be undertaken. Included are an overview of irrigation development in Nepal, discussions of recent irrigation sector reviews and of current governmental policy priorities, and (in appendices) tabulated socioeconomic data and 13 references (1981-84).