The mountain watershed of Nepal is highly rugged, inaccessible and difficult for acquiring field data. The application of ETM sensor Data Sat satellite image of 30 meter pixel resolutions has been used for land use and land cover classification of Tamakoshi River Basin (TRB) of Nepal. The paper tries to examine the strength of image classification methods in derivation of land use and land classification. Supervised digital image classification techniques was used for examination the thematic classification. Field verification, Google earth image, aerial photographs, topographical sheet and GPS locations were used for land use and land cover type classification, selecting training samples and assessing accuracy of classification results. Six major land use and land cover types: forest land, water bodies, bush/grass land, barren land, snow land and agricultural land was extracted using the method. Moreover, there is spatial variation of statistics of classified land uses and land cover types depending upon the classification methods. <br><br> The image data revealed that the major portion of the surface area is covered by unclassified bush and grass land covering 34.62 per cent followed by barren land (28 per cent). The knowledge derived from supervised classification was applied for the study. The result based on the field survey of the area during July 2014 also verifies the same result. So image classification is found more reliable in land use and land cover classification of mountain watershed of Nepal.