Natural resource-based livelihoods in mountainous regions are subject to new types of development as well as climate related pressures and vulnerabilities. On one hand, the integrity of the mountainous landscape is under pressure from the melting of glaciers, changes in water availability, rainfall patterns, and soil degradation. On the other hand, as mountainous environments become increasingly more important in national growth strategies and development priorities, new avenues for livelihoods and vulnerabilities become more pronounced. Climate change effects are expected to be disproportionately higher in mountainous regions. There is therefore a critical urgency to better comprehend these changes shaping mountainous environments and to better assess future direct and indirect impacts on ecosystem services and livelihoods. This article presents the results of an analysis of ecosystem services and livelihoods in the Upper Mustang region of Nepal. The region was selected for its particular trans-Himalayan location, development diversity, and climatic changes that have placed increasing pressure on local ecosystem services. We examine the central role of ecosystem services for remote mountain regions, particularly for the poor, the existing pressures on the key ecosystem services and local ways of adapting to climate-induced effect to ecosystem services and, cogeneration of the knowledge gaps and co-production of knowledge with communities to support local adaptation strategies. We adopted a combination of qualitative and quantitative analytical approaches. We found significant implications for local livelihoods and adaptation strategies with reference to water for farming, pasture productivity and livestock rearing, as well as tourism development. Additionally, we highlight knowledge gaps in assessing ecosystem services and opportunities for local monitoring that may close in on the gaps with an end goal of overcoming poverty.