More than 4,000 animal parts, including endangered tiger skins and rhino hides, were burned in a large pyre at Chitwan National Park, the nation's most important conservation area.
"As a country committed to conservation of wildlife and biodiversity, Nepal has destroyed animal parts stored over 20 years," Maheswor Dhakal from the Department of National Parks and Wildlife Conservation told AFP.
"With this we want to send a message that these body parts of endangered animals are not meant for trade."
The bonfire was timed to coincide with International Day for Biological Diversity today.
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Another 1,100 kilograms of ivory is still in storage since it requires a higher temperature to incinerate.
Dhakal said the storage and security of the animal specimens was also a financial burden for the small and impoverished country.
George Phocas, the regional attache for the US Fish and Wildlife Service, said the torching of the specimens was "very significant".
"It is both a way to prevent them from going to market... and it is also a statement that the government of Nepal and the people believe that it (the animal) should be in the wild," Phocas said.
Nepal suffered rampant poaching during a decade-long civil war that ended in 2006. The government ordered officials guarding wildlife sanctuaries to abandon their posts to fight Maoist rebels.
But conservation groups have praised the Himalayan nation for its progress since then in combating poachers, who mainly hunt tigers and rhinos in its national parks.