Muktinath and its high valley are located in the Mustang Bhote region. The climate and landscape here are similar to those of the Tibetan Plateau since it is situated in the rain shadow of the Greater Himalayas. Flowing through the region from north to south and forming deep gorges is the Kali Gandaki river. Muktinath lies in the district of Mustang and is situated about 20 kms northeast of Jomsom in the north central part of Nepal, at an altitude of about 3800 meters from the sea level. Named after highly referred Muktinath shrine the valley is one of religious place in Nepal for both Hindus and Buddhist.

Hindus call it Muktichhetra & salagramam, It is one of the four religious sites. Many Shaligrams found here are considered by Hindu as incarnation of lord Vishnu and worship them. According to Hindu Myth lord Vishnu turned into Shaligram because of Brinda's Curse. Hindu believes that lord Vishnu got salvation from curse of Brinda here. Therefore he is worshipped as Muktinath.

Similarly Buddhist calls this valley the Chumig Gyatsa ( place of 108 waterspouts). It is believed that Guru Rimpoche (Padmasambha) the scholar founder of Tibetan Buddhism once meditated and gained lifetime achievement of spiritual knowledge here while on his way to Tibet on 12 th century.

In front of MuktinathTemple there are 2 Kunda (Water pond), Where holy dip is believed it can wash away negative karma, the results of one's past negative actions.

There are 108 Dhara name of "Muktidhara" (continuously flowing) just behind the Temple. It has helped to make this area as center of Tourist attraction. In Janai Purnima Buddhist's Yar tang Mala celebrated here. Hindu devotees take bath under chilled water of 108 waterspouts "Muktidhara" believing that it brings them salvation. It is also believed that the deity was originated from western part of Nepal.