The tournament features basketball, volleyball, football, martial arts and tennis, said The Blue Diamond Society, Nepal's leading gay rights group.
"We are happy to be able to organise the games," said Sunil Pant, a former Nepal parliamentarian.
Some 300 local athletes had signed up for the games while 20 gay athletes arrived from countries including the United States, Russia, Japan, France and Bangladesh, Pant said.
Gay Olympic diving gold champion Greg Louganis, who is attending the event, is the big draw.
New Zealand and Australia host the "Asia-Pacific Outgames", another multi-sports gay event. But the event in Nepal has been billed as Asia's first gay games.
Homosexuals in the overwhelmingly Hindu nation have started to become more open about their sexual orientation since the end to the decade-long Maoist civil war in 2006 with the gay community staging beauty contests and other events.
Nepal said in June it would start issuing identity cards with three gender categories -- male, female and transgender.
Source: AFP
