Effective budget implementation is crucial for achieving health financing objectives, yet challenges persist in translating allocated funds into actual expenditures. This qualitative study explores health budget execution practices in three Metropolitan Cities of Nepal—Kathmandu, Lalitpur, and Biratnagar by investigating the underlying factors contributing to the gap between budget allocation and actual spending. The findings reveal stark disparities in resource distribution, with Kathmandu allocating six times more funds than Lalitpur. Despite these allocations, expenditure rates remained below 50 percent across all three cities, underscoring inefficiencies in budget utilization. Through in-depth key informant interviews with policymakers, municipal officials, and health sector stakeholders, the study identifies critical barriers to effective budget execution. These include weak intergovernmental coordination, inadequate human resource capacity, bureaucratic bottlenecks, and the absence of comprehensive long-term planning frameworks. Additionally, challenges related to procurement delays and rigid financial regulations further hinder efficient spending. The study emphasizes the need for strengthened coordination between different tiers of government, targeted capacity-building initiatives, and strategic health financing reforms to improve budget utilization. Addressing these challenges is crucial to ensuring equitable and efficient urban health service delivery in Nepal, ultimately enhancing the responsiveness and sustainability of the health system in metropolitan areas.