BackgroundNepal has committed to achieving universal coverage of quality maternal and newborn health (MNH) services by 2030. Achieving this, however, requires urgently addressing the widening inequity gradient in MNH care utilisation. This qualitative study examined the multidomain systemic and organisational challenges, operating in multi-level health systems, that influence equitable access to MNH services in Nepal.MethodsTwenty-eight in-depth interviews were conducted with health policymakers and program managers to understand supply-side perspectives of drivers of inequity in MNH services. Braun and Clarke’s thematic approach was employed in analysing the data. Themes were generated and explained using a multidomain (structural, intermediary, and health system) and multi-level (micro, meso and macro) analytical framework.ResultsParticipants identified underlying factors that intersect at the micro, meso and macro levels of the health system to create inequity in MNH services. Key challenges identified at the macro (federal) level included corruption and poor accountability, weak digital governance and institutionalisation of policies, politicisation of the health workforce, poor regulation of private MNH services, weak health management, and lack of integration of health in all policies. At the meso (provincial) level, identified factors included weak decentralisation, inadequate evidence-based planning, lack of contextualizing health services for the population, and non-health sector policies. Challenges at the micro (local) level were poor quality health care, inadequate empowerment in household decision making and lack of community participation. Structural drivers operated mostly at macro-level political factors; intermediary challenges were within the non-health sector but influenced supply and demand sides of health systems.ConclusionsMultidomain systemic and organisational challenges, operating in multi-level health systems, influence the provision of equitable health services in Nepal. Policy reforms and institutional arrangements that align with the country’s federalised health system are needed to narrow the gap. Such reform efforts should include policy and strategic reforms at the federal level, contextualisation of macro-policies at the provincial level, and context-specific health service delivery at the local level. Macro-level policies should be guided by political commitment and strong accountability, including a policy framework for regulating private health services. The decentralisation of power, resources, and institutions at the provincial level is essential for technical support to the local health systems. Integrating health in all policies and implementation is critical in addressing contextual social determinants of health.Supplementary InformationThe online version contains supplementary material available at 10.1186/s12939-023-01905-7.