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Article history: Received: 1 April 2011 Revised: 9 May 2011 Accepted: 6 June 2011 Available online: 12 June 2011 Background: Malaria is a major cause of morbidity and mortality in Nepal. The magnitude of malaria across the country is alarming and varies with location. Therefore, the present study aimed to model malaria incidence rates during 1998 to 2009 in Nepal. Methods: Data for the study were obtained from Health Management Information System (HMIS), Ministry of Public Health. A negative binomial model was used to fit malaria incidence rates as a function of year and location and provided a good fit, as indicated by residual plots. Results: In total, 83,345 cases of malaria were reported from 1998 to 2009. The mean incidence rate was 0.30 per 1000 population. The models show trends and spatial variations in disease incidence. There was decreasing trend in the incidence rates of malaria (1998-2004), followed by a more moderate upward trend until 2008, when the rate decreases again. Zero malaria incidences occurred in six districts including Humla, Jajarkot, Manang, Kathmandu, Bhakthapur and Solukhumbu districts for over twelve years. Higher incidence occurred in Kanchanpur, Kailali, Bardiya, Kavre, and Jhapa districts for the study period. Conclusion: Malaria is still a public health problem in Nepal. This study showed a steady decreasing trend in malaria incidence but the numbers of cases are still very high. Higher rates were observed in Terai Region and border areas. These findings highlight the need for more systematic and effective malaria control measures on malaria burden areas of Nepal.