A field experiment was conducted during the winter growing season of 2003 in upland soils of Bharatpur municipality, Chitwan valley of Nepal to evaluate the effect of levels and time of lime application and their interaction on selected soil properties and subsequent effect on wheat growth. Three replications of 18 treatment combinations consisting of time as the main plot factor and levels of lime as the sub-plot factor were imposed on a split plot design. The treatments included were 6 levels of lime (0, 1.5, 3.0, 4.5, 6.0 and 7.5 Mg/ha) applied at three time intervals (30, 20, and 10 days) before the planting of wheat. Ground lime (CaCO3 ,99% purity) was broadcast and mixed into the soil at field capacity to improve lime solubility. Soil samples (0-15cm) were analyzed to determine the changes in selected physico-chemical properties as a result of lime application. Yield and yield-attributing characteristics of wheat, including crop lodging and economic analysis, were also measured. Data analysis revealed that liming (7.5 Mg/ha) had a significant (p< 0.05) effect on improving soil acidity from strong (4.5) to medium pH range (5.5). It also increased cation exchange capacity, available phosphorus and calcium content of soil. The soil pH (r=0.91, p<0.01) and calcium content (r=0.96, p<0.01) were strongly correlated to lime application. Although statistically non-significant (p<0.05), grain yield was increased appreciably. The highest grain yield (4.46 tons/ha) was recorded from the application of 4.5 Mg/ha of lime corresponding to a 20% yield increase relative to no liming. However, from an economy perspective, which is of prime concern for poor farmers with small land holdings, it is interesting to note that the lowest level of liming (1.5 Mg/ha) that produced 4.25tons/ha of grain yield was found to provide the highest net return (US$355/ha). Farmers also judge the effect on crop lodging as an important basis to adopt new technology, because grain yield and straw biomass are equally important in subsistence farming systems. Observation of crop lodging indicated that limed plots had significantly lower percentages of lodging (12.4) than plots without liming (48.7). Non-significant effect of days to liming on selected soil and crop properties indicated that farmers need not apply lime long before planting. Ground lime can be effectively solubilized in these coarse soils relatively quickly under the Udic soil moisture regime. While the effect of level and time of lime application might differ from one soil to another, the findings of this study carry three important conclusions particularly to the poor farmers of this region. One, they would still be better off even if they apply relatively low levels of lime. This study thus contradicts the widely held notion that high doses of lime are necessary for high crop yield; two, farmers may apply lime shortly before planting. This would help them harvest the previous crop in a timely way; and three, the farmers would be able to keep the cost of liming low which in turn would render a greater economic return from a liming program in wheat production in this region of Nepal.