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This study analyzed nationally representative sample of women (N =10793) to quantify the magnitude and predictors of poverty among indigenous peoples of Nepal. The study estimated the risk of poverty among the major ethnic groups in Nepal. Cross-sectional data from the Nepal Demographic and Health Survey 2006 (NDHS 2006) was used. Step-wise multivariate logistic regressions were conducted. The results show that significant variations exist in the risk of poverty between indigenous and non-indigenous peoples. Tamang were at the highest risk of poverty among the indigenous peoples. Controlling for geography further exacerbated the disparity between indigenous and non-non indigenous peoples. Attentions to the intrinsic development practices are needed to determine if these variations are reflective of the institutions that systematically isolate geographic territories of the indigenous peoples.