This publication summarises the lessons learned and recommendations from the participatory action research carried out in Nepal between September 1996 and June 2006 under the ICIMOD-coordinated People and Resource Dynamics Project (PARDYP) in Mountain Watersheds of the Hindu Kush-Himalayas, funded by the Swiss Agency for Development and Cooperation (SDC), the International Development Research Centre (IDRC), and ICIMOD. The research focused on farming systems, agricultural productivity, water management, and access and equity issues in resource management in middle-mountain watersheds. The publication discusses such topics as soil erosion, nutrient leaching, water supply and demand, water management, water quality, forest cover, commercialisation of agriculture, and improved low-cost on-farm options, including methods of composting. The challenge of livelihoods improvement and accompanying issues of poor access, equity, and governance place the activities in context; ways of sharing these findings and of scaling up are considered, and various participatory approaches described. The publication will be useful for extension workers, planners, development specialists, researchers, and policy makers in national institutions, NGOs, and donor agencies working on watershed management and mountain agriculture.