Rural-urban difference in child nutritional outcome is evident in most of the low-income countries, including Nepal. Minimization of rural-urban gap in child nutrition is imperative to ensuring equitable investment in early childhood development, especially in a predominantly rural country like Nepal. This study explains differentials in child nutritional outcome as measured by under-five stunting, thus, capturing prolong differences in the population-level deprivation in rural and urban areas. The primary objective of this study is to explain whether existing rural-urban differences in under-five child stunting is best explained by differences in the level of nutrition-sensitive endowments (covariate effect) or their returns (coefficient effect). This study utilizes recently developed Unconditional Quantile Regression (UQR) based methods to analyze the association between determinants of child stunting and child's heightfor-age at rural, urban, and country levels. Subsequently, UQR based decomposition of ruralurban differences in under-five child stunting is conducted in the entire distribution of child's height-for-age with further comparative analysis in the sub-sample of children belonging to age groups 0-23 and 24-59 months. Findings of this study indicate the dominance of covariate effects and minimal share of coefficient effects in explaining the rural-urban differences in under-five child stunting in Nepal. Household wealth, mother's education and health services environment comprising postnatal and antenatal care are found to explain most of the rural-urban nutritional gap in Nepal. Low levels of coefficient effects imply that interventions need not have fundamentally different approaches in rural and urban areas, and future policy efforts should instead prioritize equalization of nutrition-sensitive endowments.Rural-urban difference in child nutritional outcome is evident in most of the low-income countries, including Nepal. Minimization of rural-urban gap in child nutrition is imperative to ensuring equitable investment in early childhood development, especially in a predominantly rural country like Nepal. This study explains differentials in child nutritional outcome as measured by under-five stunting, thus, capturing prolong differences in the population-level deprivation in rural and urban areas. The primary objective of this study is to explain whether existing rural-urban differences in under-five child stunting is best explained by differences in the level of nutrition-sensitive endowments (covariate effect) or their returns (coefficient effect). This study utilizes recently developed Unconditional Quantile Regression (UQR) based methods to analyze the association between determinants of child stunting and child's heightfor-age at rural, urban, and country levels. Subsequently, UQR based decomposition of ruralurban differences in under-five child stunting is conducted in the entire distribution of child's height-for-age with further comparative analysis in the sub-sample of children belonging to age groups 0-23 and 24-59 months. Findings of this study indicate the dominance of covariate effects and minimal share of coefficient effects in explaining the rural-urban differences in under-five child stunting in Nepal. Household wealth, mother's education and health services environment comprising postnatal and antenatal care are found to explain most of the rural-urban nutritional gap in Nepal. Low levels of coefficient effects imply that interventions need not have fundamentally different approaches in rural and urban areas, and future policy efforts should instead prioritize equalization of nutrition-sensitive endowments.