Perinatal mortality rate (PMR), which indicates quality of care provided to women in pregnancy, at and after child birth and to the newborns in the first week of life, is high in Nepal. Published results show wide variation in PMR in the country. Higher rates are in the community and hospitals outside Kathmandu. Reduction of PMR is an important strategy in improving maternal and neonatal health and requires identification of factors related to perinatal deaths. Perinatal death audit is a process of assessing factors related to a perinatal death. It helps in reducing perinatal mortality by identifying preventable factors related to perinatal deaths. Classifying perinatal deaths into 5 groups of Wigglesworth helps in identifying major obstetric or neonatal factors related perinatal deaths. Major factors related to perinatal deaths in Nepal are poor antenatal care, poor monitoring and assistance at birth and lack of adequate neonatal care services. Regular perinatal audit would identify factors and lapses related to perinatal deaths and thus help in taking appropriate interventions to reduce avoidable perinatal deaths.