The origin and evolution of the defence administration of modern Nepal dates back to the unification of Nepal in 1770. From the foundation to until popular movement, the defence administration was directly overseen by the Crown itself.

Before 1950, there was no division of duties between the Ministry and the Army headquarters. The Commander-in Chief and the Senior Commanding General between themselves dealt with the whole range of administration and policy regarding defence. For the first time in the history of Nepal, a separate ministry by the name of Defence Ministry was set up in the interim Government of 1950 headed by Prime Minister Mohan Shumsher. The first Defence Minister was Babar Shumsher . The organizational structure of the Defence Ministry at the time was quite simple having only two branches, Viz. (i) General and (ii) Budget. The Ministry had a secretary, two deputy secretaries, and two assistant secretaries. Since then the ministry has undergone continuous evolution and assumed the present structure.

The Ministry of Defence was established to protect and defend the nation and the people from internal instability and external threats by ensuring the sovereignty, national independence and integrity of the country.