It is estimated that the Maoist conflict has created 250,000 Internally Displaced Persons (IDPs) in Nepal. The livelihood questions of these IDPs are crucial to the state. However, knowledge on the livelihoods of these IDPs has mostly been derived from short term studies undertaken by national and international actors. These studies are moreover guided by a mandate to suggest solution to what they see as a problem. These studies see IDPs as static groups, vulnerable and fully in need of support and assistance. Thus, they ignore the human agencies of the IDPs as actors, their livelihoods strategies and livelihood practices. So, the research was carried out with an objective of analyzing the dynamics of the IDPs? livelihoods in the urban areas. This study takes the IDPs as actors and the urban areas as social field. It looks at the livelihood of the IDPs by analyzing their practice in the urban areas and looking at both the individual (micro) as well as the structural (macro) factors that affect their livelihood practices. These issues were examined in three urban areas of Nepal- Kathmandu valley, Banke and Dang using standard qualitative methods of data collection and analysis. A total of 270 IDPs and 100 host community members and 50 people from different national and international organizations and experts who were related to the issue of the IDPs were interviewed. The conceptual framework derived its perspective from macro-micro integration perspective of sociological theories. The framework has adapted concepts from "Structuration Theory" (Giddens, 1984) and "Theory of Practice" (Bourdieu, 1977) and livelihoods frameworks- all of whom have used macro-micro integration perspective in looking at a social phenomenon. Besides this, the study has analyzed migration theories from the macro-micro perspective and examined it in the internal displacement case. The study finds that the present understanding of the IDPs as a poor incapacitated mass is very narrow. Based on its findings, the study had divided the IDPs into 3 categories. The categories are based on capital base and, their socio-economic and political status in the host area. Based on the category they belonged to, the needs and concerns of the IDPs were different. Among them, only the IDPs in the third category are the most vulnerable in terms of their capital base and socio-economic space. Associations in political and other organizations were found to be an important asset for gaining access to different socio-economic space. Regarding integration in the host community, my study found out that except when segregated in camps, IDPs have no significant problems of integration only because they are an IDP. However, when they were segregated from the host community as when they were living in camps or in informal settlements in the urban areas, the host community did not have a very good perception towards. Except in such situations, the host communities were neither hostile nor benevolent in their practice towards the IDPs. Regarding the experience of displaced women, their most different experience was that most women did not want to go return to the villages permanently. Education and health facility for their children was the most important attraction for them in the host areas. Though women who were living in the urban areas without their family were vulnerable, they felt that urban areas had opened more space to them for positive outcomes. This was also in case of women who lived with their family. However, such agency of women in the host area was concentrated in the micro level in the household and their community but could not extend to more macro-level. Regarding policies and practice of support to the IDPs, the study found that the situation of Nepal has posed a question to the existing international definition of IDPs. The state has concentrated its effort on returning the IDPs to their villages of origin. The study found that for the IDP in all the three categories, return was the least desirable option at the present. Apart from this, the support was found to be ad hoc with a vision of short-term relief. It was implemented as ritual practice and overwhelmed by international methods. Significant local ways of looking at the problem and coping with it were ignored. This closed doors for positive outcomes.