This paper assess the relationship between reducing emission from deforestation and forest degradation (REDD) regulation and farmers’ choice for livestock production systems using a multinomial choice model fitted to data from household survey of 324 farmers from Nepal. The results indicate that intensive livestock system is more likely to have chosen by farmers involving in REDD program. The association between REDD and livestock systems remain when controlling for all factors included in the study. Better access to market and extension, distance to the river, total livestock units, and keeping improved breed are significant and critical for choosing intensive system. The results suggest that REDD regulation may have reduced grazing and forest use and farmers alternative livestock system becomes more intensive. Government policies should consider livestock management system as an important factor while formulating national REDD strategy. Further study is needed to evaluate the net effect of REDD and intensive system.