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Watershed degradation driven by land-use change, climate variability, and rising water demand threatens water security and ecosystem services in underdeveloped countries like Nepal. Local participation is essential for effective conservation of watersheds and the sustained provision of ecosystem services. However, the determinants of such participation remain underexplored in the Terai plains, where socio-ecological conditions differ significantly from those in upland regions. This study examined the socio-demographic, environmental, and institutional factors influencing local participation in watershed management in Eastern Nepal. Data was collected through a convenience survey of 350 households, of which 279 complete responses were analyzed using binary logistic regression. Eight predictors significantly influenced participation. Perception of land-use change, larger farm size, proximity to water bodies, higher farming income, irrigation shortages, community support for conservation, and receipt of technical assistance increased the likelihood of participation. In contrast, larger family size reduced participation, suggesting competing labor and livelihood demands. Age, sex, land ownership, and financial assistance did not have a significant effect. The results highlighted how ecological exposure, livelihood dependence on agriculture, and institutional engagement shape participation patterns in the lowland Terai context. These findings underscore the importance of integrating awareness-building, targeted technical support, and water security considerations into participatory watershed initiatives. Strengthening institutional outreach and addressing the constraints faced by smallholders and larger households may enhance participation and improve the effectiveness of watershed management programs in similar socio-ecological settings across Nepal and the broader Global South.