Rice is the most important cereal crop of Nepal from the perspectives of food security and livelihood. In spite of this, its yield is quite low and there is still wide gap between potential and national average rice yields. One of the reasons for this is poor adoption of improved rice varieties in farming communities. In this chapter, we analyzed the status of improved rice varieties adoption, sources of improved rice varieties in the farming communities, and influence of socio-economic variables on the adoption of improved rice varieties. The data for the study was collected from 180 households covering three Tarai districts, Siraha, Chitwan and Kailali, of Nepal from October to November 2011. A binary logistic regression was employed to analyze the data, and the adoption of improved varieties was defined from the perspective of whether farmers buy seed from the market or not. The result shows that, in 72.7 % of cases, farmers adopt improved varieties, and these varieties consist of both modern varieties and farmers’ varieties. Farmers buy these varieties from various sources though neighboring farmers and agrovet are the most popular sources. Farmers’ behavior in adopting these varieties is mainly explained by irrigation facility, household’s membership in community-based organizations, and seed price.