A cross-sectional study was conducted from November 2008 to May 2009 to estimate the prevalence of Salmonella in retail meat shops in Kathmandu. The methods followed were ISO 18593:2004 for swab sample collection, ISO 6579:2002 for Salmonella isolation and manufacturer’s instructions (SIFIN®, Germany) for serotype identification. A questionnaire was used to collect information on some of the risk factors of shops likely to be associated with Salmonella identification. A total of 492 environmental swab samples (164 chopping board samples, 164 knife samples and 164 table samples) from 82 retail meat shops were analyzed. The prevalence of Salmonella positive shops was 40.2% (95% CI: 29-51). The isolation rates of Salmonella from chopping boards (36.0%), knives (32.9%) and tables (25.0%) were not significantly different (P > 0.05). Retail meat shops were 1.9 times more likely to yield Salmonella in the evening (38.2%) as compared to the morning (24.4%) (P = 0.001). S. Typhimurium (54.5%) was the most common serotype found in retail meat shops followed by S. Enteritidis (16.9%), S. Haifa (13.6%), S. Virchow (10.4%), S. Agona (3.9%) and S. enterica (0.6%). Among the risk factors examined, “hygiene status of shop”, “type of shops”, “number of person handling meats”, “number of knives used”, “number of kinds of meat sold” and “number of kinds of meat sold using different numbers of knives” were individually significantly (P < 0.05) associated with Salmonella contamination in the retail meat shops. After univariate analysis of these risk factors, a final logistic regression model with Salmonella yes or no category of shops as outcome variable identified four significant predictors. Odds ratios, indicating the likelihood increase of a shop to achieve Salmonella positivity status were 10.17 for multiple persons rather than a single person involved, 7.66 for open rather than closed shops, 9.44 for use of several knives rather than one knife and 5.18 for single kind of meat using several knives. The results of this investigation revealed that retail meat shops to a noticeable extent are Salmonella contaminated, with a considerable degree of cross-contamination between meats and personnel and equipment used during a day in processing of meats.