INTRODUCTION: Access to hemodialysis is limited in Nepal due to geographical terrain and hemodialysis centers being mostly limited to major city. Therefore, continuous ambulatory peritoneal dialysis is likely to be a better option in Nepal. In 1998, CAPD was initiated in Nepal without success. High rate of peritonitis was cited for failure. Hot tropical climate and poor sense of hygiene among patients was thought to be responsible for the high rate of peritonitis. A new CPD program was started in 2002 in our institute. We reviewed the incidence of peritonitis and factors predisposing. METHODS: All chronic renal failure patients on CAPD since 2002 to 2007 were included in the study. They were followed up for complications and treatment outcome. Patients complicated with peritonitis (N=19) and patients without peritonitis (N=31) were compared. RESULTS: A total of 50 patients were enrolled and mean duration of dialysis was 12 month per patients (Total patients month=600). Twenty six episodes of peritonitis in 19 patients were recorded during this period. Fourteen episode of peritonitis were culture positive. Culture sterile peritonitis was recorded in 12 episodes. Low serum albumin was predisposing factors for peritonitis and peritonitis rate was higher in end stage disease related due to diabetes mellitus. CONCLUSION: Peritonitis rate was comparable in our new program. Thus peritonitis is not a limiting factor for growth of CAPD in Nepal. Hypoalbuminemic and diabetic patients are prone for CAPD related peritonitis.  KEYWORDS: continuous ambulatory peritoneal dialysis, Peritonitis, Peritonitis rate.