This study documented the prevalence and correlates of tobacco use among women of reproductive age in Nepal using nationally representative data. We utilized the 2006 Nepal Demographic and Health Survey that interviewed 10,793 women and 4,397 men. We analyzed the couple’s data or households (N = 2,600) in which both husband and wife were interviewed. We examined the effects of women’s empowerment—measured by education, employment, intra-household decisions, and age—on their tobacco use controlling for other individual and household characteristics. Women’s empowerment had mixed effects on tobacco use. While women’s education was inversely associated with their tobacco use, their age, employment and ability to make intra-household mobility decisions were positively associated with smoking. Women with primary and beyond primary education were 48 and 92 % less likely to smoke compared to women with no education, respectively. Tobacco use among women increased dramatically with age from 8 % in teen years to 42 % in their forties. A 1 year increase in age increased the odds of tobacco use by 6 %. Women whose husbands smoked were twice as likely to smoke. Nepal should not only restrict tobacco use in public places by implementing its Tobacco Control and Regulatory Act of 2010 but also focus on encouraging smoke-free homes by increasing awareness about the health consequences of tobacco use and secondhand smoke among populations most likely to smoke that include nearly all men, employed women, women with low levels of education, women whose spouses smoke and those who are 30 and above in age. Additionally, a long term goal should be to ensure at least 5th grade of education for all girls.