This article highlights the results of an action research to upgrade mountain farmers of bay leaf (Cinnamomum tamala Nees and Eberm) in Udayapur district of Nepal. Farmers received low prices, lacked market information, capacities, and institutional mechanisms, and were exploited by traders. To address these constraints, three independent but interlinked pro-poor value chain (VC) upgrading strategies comprising VC coordination upgrading and horizontal and vertical contractualization were implemented. Information was collected from focus-group discussions with collectors, traders, and facilitators, and a questionnaire was used to collect pre- and postintervention data (n = 120). VC upgrading strategies improved harvesting practices, increased farmers’ bargaining power, and led to a threefold increase in price, which increased household incomes. Results demonstrated improved terms of participation of farmers and a general increase in market price of bay leaf in Udayapur. The study approach can be up scaled to reduce poverty from high value products.