Abstract: This paper investigates the relationship between the unemployment rate and economic growth in Nepal. Gross Domestic Product (GDP) at constant price has been used as an indicator of economic growth. The data regarding GDP and unemployment rate were collected from World Bank database for the study. Correlation and Regression analysis were used to study the nature and degree of effect of economic growth on unemployment rate. It was found that there is a strong negative correlation between economic growth and unemployment rate. Also, it was found that GDP accounts for 48.6% of cause of change in unemployment rate. The findings are in line with the Okun’s law.