Nepal adopted a unique post-conflict development framework for mobilizing international support and government resources to facilitate its peace process. The main focus of this paper is the role played by the Nepal Peace Trust Fund (NPTF) in Nepal’s transition. The paper concludes that the main strengths of this model were its success in keeping ex-combatants in cantonments by creating a conducive environment, its harmonization of funds from donors and the government, and its contribution to national elections. However, the NPTF’s defects were many, including weak monitoring mechanisms, an inability to prepare for successful rehabilitation and to initiate projects to support transitional justice, and failure to stop the misuse of funds and corruption. Having taken stock of these failures, the paper explores a core reason for them: the NPTF’s isolation from the political process.