In 1997, Local Initiatives for Biodiversity, Research and Development (LI-BIRD), in collaboration with researchers of Bangor University (UK), the Nepal Agricultural Research Council (NARC) and Bioversity International, implemented Participatory Plant Breeding (PPB) to develop farmer-preferred new varieties while maintaining useful traits of local varieties. Core components of PPB include: (1) identification of community, crop and farmers’ needs; (2) selection of breeding material; (3) crossing selected parents; (4) selecting in segregating materials in farmers’ fields; (5) quality and quantitative assessments by farmers and breeders, including post-harvest traits; (6) development of local seed supply systems; and (7) registration/release from the national system. Key outcomes were the development of new rice and maize varieties using local varieties as breeding parents. Kachorwa Community Seed Banks produce around one ton of newly developed rice variety seeds every year, which are sold and distributed locally. The rice variety registration proposal has been submitted to the National Seed Board. The maize variety is already registered in the national system and a community-based seed producer group is producing and marketing seeds of the newly developed variety. Lessons learned include the importance of involving farmers in setting breeding goals and strengthening their institutions.