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Ecological resettlement (ER), or conservation-led displacement, is widely implemented to safeguard biodiversity but often produces complex socio-ecological outcomes. This study assessed the environmental justice (both social and ecological) impacts of ER in Nepal’s Terai Arc Landscape (TAL) using an enhanced (including social, ecological, and environmental aspects) environmental justice (EJ) framework. Data were collected from 240 households across all resettled villages within the Chitwan and Parsa National Parks (NPs) of Nepal through household interviews, key informant interviews, focus groups, and field observations, supplemented by policy reviews, reports, and unpublished documents. Household demographics indicated an average family size of 5.5, gender parity (664 females, 658 males), and diverse caste/ethnic composition (ethnic: 146 households; higher caste: 64; lower caste: 6). Wealth distribution and literacy were uneven, with disparities in land ownership, assets, and social positions. Social and ecological justice outcomes were analysed using chi-square and McNemar tests. We observed a significant difference (p < 0.05) in substantive justice (food, shelter, clothing, and security) attributes before and after the resettlements. Similarly, significant improvements post-resettlement were observed in procedural and recognition justice: participation in decision-making increased from 43% to 62% (χ2 = 12.34, p < 0.05). However, recognition of Indigenous knowledge and FPIC rights remained low, with 93% of households reporting inadequate acknowledgment (χ2 = 198.5, p < 0.05). Distributive justice indicators, including access to compensation and forest resources, showed mixed outcomes, with 52% reporting fair compensation and 48% citing inequities (p < 0.05). Ecological outcomes also shifted significantly: forest cover decreased in 65% of surveyed areas post-resettlement, while grassland extent increased in 28% (χ2 = 27.4, p < 0.05). Water source accessibility declined for 48% of households (χ2 = 21.6, p < 0.05), and bushfire incidence decreased by 15% (χ2 = 9.8, p < 0.05). Composite scoring revealed strong linkages between social justice deficits and ecological downturn in the resettled areas, suggesting that inadequate participation, recognition, inequitable compensation, and ecological degradation shift the issues from parks to the outside and exacerbate environmental vulnerability. These findings demonstrate that ER can achieve partial ecological objectives inside the parks but often perpetuates social inequities and ecological downturn in the resettled areas, undermining the long-term sustainability of the socio-ecological landscape. The study highlights the critical need to integrate social justice, participatory governance, and ecological monitoring into resettlement planning. Future policies should be grounded in the understanding that conservation effectiveness and social equity are mutually reinforcing, and that ignoring justice dimensions risks undermining both biodiversity outcomes and human wellbeing.