The importance accorded to ethnoecological knowledge for suggesting new paths in scientific research, understanding ecological processes, and designing sustainable management of natural resources has grown in recent years. However, variation in knowledge and practices, both within and across cultures, has not been given much attention in resource management nor in developing scientific understanding of the ecological status of key resources. In this paper, the authors discuss the heterogeneity and complexity of local ecological knowledge in relation to its practical and institutional context with respect to management of Himalayan medicinal plants. They show factors affecting this variation, and discuss how knowledge is put into action. They assess variation in knowledge relating to the diversity of medicinal plant species, their distribution, medicinal uses, biological traits, ecology, and management within and between two culturally different social groups living in villages located in the Shey-Phoksundo National Park and its buffer zone in northwestern Nepal. Heterogeneity in levels of knowledge and in practices both within and between these groups corresponds to differences in level of specialisation in relation to medicinal plants, to socio-cultural and institutional contexts, and to extra-local factors that govern people’s activities. The authors argue that understanding the heterogeneity of knowledge and practices within a given area is crucial to design management practices that build on the intricate links between knowledge, practices, and institutional context. It is also important to develop ecological studies that will best inform management.