A study was carried out at Sardikhola VDC of Kaski district to assess the noise levels produced from stone cutting industries during their activity cycle and to predict the risk of environmental noise induced health effects to the workers and neighbours to the industries. Noise levels were measured by using a digital sound level meter (Lutron SL - 4010) in twelve industries (5 with single machines and 7 with double machines) during their activity cycle for three times a day for three days. Altogether, 35 questionnaires were subjected to the exposed group and 15 to the non-exposed group. The observed noise levels in all industries exceeded the allowed limit value of 85 dB(A) as recommended by WHO. The observed maximum and minimum noise levels for selected single machine industries for average equivalent sound pressure level (LAeq), nominal 8-hour noise exposure level (LAeq,8hr) and weekly average of the daily noise values (LEP,W) were 110 dB(A), 108 dB(A) and 105 dB(A); and 104 dB(A), 104 dB(A) and 101 dB(A) respectively. Similarly, for the double machine industries it was 108 dB(A), 106 dB(A) and 103 dB(A); and 103 dB(A), 102 dB(A) and 99 dB(A) respectively. The major health effects induced by environmental noise were found to be tinnitus followed by speech interference, hypertension, irritation, loss of sexual potency, difficulty to concentrate and blood pressure rise. The crude OR and 95% Cl for the exposed subject were 6.42 (0.75, 55.12).