Eighteen men sporting cowboy hats, lilac satin ties and tight jeans drew wild applause as they strutted across the stage in a Kathmandu auditorium, grooving to the Black Eyed Peas pop anthem "Let's Get It Started".
The event, billed as the country's first all gay male talent and courage contest saw contestants competing for a host of titles, including "Mr. Friendly", "Mr. Personality" and "Mr. Red Ribbon" for running anti-HIV campaigns.
Biswo Raj Adhikari, a 24-year-old sociology student from Makwanpur district near the capital was crowned "Mr. Handsome" and said he was thrilled to win the title.
"My family and friends will be proud of me as I will be able to inspire other gays who hesitate to come out openly," he told AFP.
Parents and well-wishers of the contestants thronged the event organised by leading LGBT rights group, The Blue Diamond Society (BDS), cheering on participants as they answered questions about discrimination against sexual minorities.
The country's only openly gay lawmaker and BDS president, Sunil Babu Pant said: "This programme has encouraged gay men to reveal their hidden talents and will create more awareness about gender and sexuality".
"Although treatment of gays has improved in recent years, many are still not willing to come out openly," he told AFP.
He said he hoped the pageant would become an annual event. BDS held South Asia's first gay sports tournament in September 2012, attended by Olympic diving champion Greg Louganis.
Nepal is a conservative Hindu country which arguably has some of the most progressive policies on homosexuality in Asia. A landmark 2007 court ruling ordered the government to enact laws guaranteeing the rights of gays.
The country's new constitution, currently being drafted by lawmakers, is expected to define marriage as a union between two adults, regardless of gender, and to outlaw discrimination based on sexual orientation.