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Within the decentralization framework of Government, the Ministry of Health (MoH) Nepal initiated the decentralization of primary care services closer to citizens. This paper aims to examine and understand the effect of decentralization at the district health service from the perspectives of service users and providers.Using non-probability purposive sampling, we conducted a series of in-depth interviews and focus group discussions in four primary health care institutions with service users, providers and other stakeholders. QSR©NVivo7 software was used to analyse and categorize the data under emerging themes.Decentralization was positively associated with increased service access and utilization and improved service delivery. The study also revealed areas of concern and possible improvement and identified the barriers to implementing these improvements. Problems described included three main areas: functions, functionaries and funding.Both service users and providers convey a generally positive message about the health sector decentralization. The active involvement of service users, providers, policy-makers in the process of decentralization and clear national and local policy agendas may bring positive changes in district health services.