Nepal is a mountainous country located between India and China, and has a large elevation difference in a north-south direction. The elevation difference accounts for physical and social diversities in the country. This study examines the relationship between topographic factors and distribution of residential areas in the Sagarmatha zone of eastern Nepal using information derived from topographical maps including a high-resolution digital elevation model (DEM). Residential areas in the study area are distributed from 400 to 5,200 m in altitude. More than 80% of them are concentrated from 1,000 to 2,500 m, and 2% are located above 3,000 m. Residential areas below 3,500 m tend to occur on relatively steep ridges, and those below 2,500 m tend to occur on north-facing slopes. Residential areas above 3,500 m tend to occur on relatively gentle valley sides and south-facing slopes. These differences in the residential environment by elevation are attributed to differences in topographic and climatic condition. This study suggests that GIS technology and digital data can provide basic information at a macro scale to solve regional problems in Nepal.