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Monsoon floods are frequent in the Tarai region of Nepal and claim thousands of lives and substantial numbers of properties every year. Certain human activities are more affected than others in the case of the same hazard. This study analyzes vulnerability to flooding among Tharu households. Data were collected by employing household surveys, group discussions, and key informant interviews in the Thapapur Village Development Committee (VDC) of Kailali district, western Tarai, Nepal. The analysis presented in this study is based on the theory that underpins the pressure and release (PAR) and access models. The results show that Tharu people are the major inhabitants in the study area and they prefer to live within their community; many ex-bonded laborers (marginalized people) choose this location for residence. Human causalities have been reduced in recent years due to easy access to cell phones, which has facilitated effective flood warnings with suitable lead times, but agriculture production loss and other losses are still high. Agricultural land is not only an important natural asset but is also considered a financial asset due to its high price and private ownership. The study concludes that subsistence agriculture-based households with small landholding sizes and less income diversification are highly vulnerable to flooding. Improper resettlement of ex-bonded laborers and land fragmentation due to separation of family members are the most prominent factors resulting in small landholdings. The results can guide government authorities to develop proper flood management strategies for the people living in the lowlands (particularly the Tarai region) of Nepal.