Owing to unique topographic and ecological diversity, central Himalayan state of Nepal is exposed to adverse impacts of climate change and associated disasters. However, countrywide historical assessment of mean and extreme temperature changes, a prerequisite for devising adequate adaptation strategies, is still lacking. Here, we present a comprehensive picture of mean and extreme temperature trends across Nepal over the 1980‐2016 period, based on high quality daily temperature observations from 46 stations. Our results suggest that besides winter cooling in southern lowlands, the country features a widespread warming, which is higher for maximum temperature (~0.04°C yr‐1) than for minimum temperature (~0.02°C yr‐1), over the mountainous region than in valleys and lowlands and during the pre‐monsoon season than for the rest of the year. Consistently, we found a higher increasing trend for warm days (13 days per decade) than for warm nights (4 days per decade), whereas the rates of decrease for cold days and cold nights are the same (6 days per decade). Further investigations reveal that pronounced warming in maximum temperature over mountain regions can be attributed to less cloud cover and snowfall in recent decades during non‐monsoon seasons as a result of positive geopotential height anomalies and strengthening of anticyclonic circulations in the mid‐to‐upper troposphere. Similarly, increased stability of lower atmosphere during winter and post‐monsoon seasons caused prolonged and frequent periods of fog over lowlands, resulting in significant winter cooling there.