The expansion of community forestry practices since the late 1970s and, recently, outmigration have led forest cover to increase in Nepal's mid-hills catchments (>52% of the 4.3 million ha). The catchments traditionally provide food and income for local communities, and they are increasingly important for ecological functions, particularly downstream water use. While the hydrological effects of increasing forest cover are generally unclear in the mid-hills region, mismatched perceptions of forest–water relationships between sections of Nepalese society and scientists challenge the management of the catchments in meeting traditional community needs and growing water demand sustainably. This paper shows the prevalence of the culturally formed notion of “more forest–more water” within broader Nepalese society and the conservation-centric attitude of forest policymakers, who focus on reforestation and afforestation. These perceptions contradict general scientific evidence that shows forest development reduces catchment water yield. Conversely, the results of semistructured interviews (n =150) conducted among members of community forest user groups (CFUGs) in the Roshi Khola catchment of the mid-hills district Kavre showed that 44% of respondents consider that forests contribute to increased water quantity, and 37% think forests decrease it. Furthermore, the respondents that viewed forests as reducing water quantity disliked pine forests because these allegedly caused the reduction. Interestingly, there was a positive correlation between the duration of membership in the CFUG and the perception that forests increase water. Thus, while there is a high research need to understand the forest–water relationships in the mid-hills, extensive communication of research results and deliberation about them are crucial to developing widely acceptable plans for managing the catchments. This is particularly important in the context of expanding community forestry practices and the current debate on scientific forestry presented by Nepal's key forestry documents, including the Forestry Sector Strategy 2016–2025 and Forest Policy 2019.