We assessed the economic values of the selective ecosystem services of the Koshi Tappu Wildlife Reserve, using a combination of market-based and value transfer methods. The results showed that economic benefit generated from the reserve was worth USD 16 million per year, equivalent to USD 982 per household. The economic benefit generated from provisioning services accounted for about 85%. Although non-use values and some components of regulatory services were not considered in the study, our findings clearly highlight the vital importance of the economic benefit generated from the reserve for wellbeing of the local people. This has significant policy implications for balancing development and conservation efforts. Given the high levels of poverty in the buffer zone communities and the limited alternative livelihood options, pressure on the reserve is increasing and the management investment is insufficient, which has accelerated the degradation of vital services thereby imposing further constraints on conservation goals. We recommend that the ecosystem services provided by the reserve should be recognized as an integral part of a strategy and ensure sound policy and institutional mechanisms exist to empower and provide local communities to act on the options for minimizing trade-offs and promoting synergies using a holistic approach.