Objectives: The coronavirus disease (COVID-19) pandemic and news of daily increasing cases inside Nepal and worldwide is adding to the fear that leads to anger, anxiety, frustration, and stress, emotions that directly affect sleep quality. This study aimed to assess sleep disturbances during the COVID-19 pandemic in a Nepalese population. Methods: This cross-sectional study recruited 206 Nepali residents who completed anonymous self-administered questionnaires. The Insomnia Severity Index (ISI) questionnaire was used to measure sleep disturbances before and after the COVID-19 pandemic. The gathered data were analyzed using descriptive statistics and inferential statistics using SPSS version 20 statistical software. Results: There was a significant variation in sleep disturbances among Nepalese residents before versus after the COVID-19 pandemic (p<0.001). The prevalence of clinical moderate insomnia has increased tremendously in Nepalese individuals. Before the pandemic’s onset, only 3.9% of the participants had moderate to severe levels of clinical insomnia; after its onset, this value increased to 17.5%. The mean ISI scores were 6.35±4.65 and 8.01±6.01 before and after the pandemic’s onset, respectively. Conclusions Our study findings suggest that people are suffering tremendously with sleep disturbances and calls for further research and active measures to help increase sleep quality during the COVID-19 pandemic.