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Despite being relatively less urbanized country, the migration of people from countryside to urban areas in search of better opportunities in terms of quality of life, education and employment has been increasing in recent years in Nepal. Kathmandu, the capaital of Nepal has experienced mass flow of people in the last decade making it densely populated and congested. Yet, desire of all people to live a better quality of life is impossible thus resulting the development of slums and squatters. These informal settlements are characterized as having poor environmental conditions, deteriorating sanitation as well as lack of social and economic investments. This study assesses how people living in the informal settlements along Kathmandu's holy Bagmati River are coping with the hazards and risks. This study establishes justification in providing explanation on acclimatization of people in such settlements, presenting an integrated intervention package for upgrading the overall environment of these settlements, explaining the proactive areas for intervention and presenting appropriate governance issues. This study is expected to be useful to policy and decison makers and researchers.