Rice is major staple food and accounts for around 50 percent area under cultivation of total cereal crops cultivation in Nepal. The demand of rice seed is high and quality rice seed is crucial for better yield as it has significant role in national food security and income generation of Nepalese people. In this regard, this study attempted to analyse profitability and resource use efficiency of rice seed production in Jhapa, Chitwan and Bardiya districts from Terai belt of Nepal. The total of 100 samples from each district were selected using simple random sampling technique. The productivity of rice productions in Jhapa, Chitwan and Bardiya were 4.21, 3.89 and 4.65 Mt/ha respectively. The study showed that the average cost of rice seed production was NRs. 82,021, and average gross revenue was NRs. 164,000 resulting in an average net profit of NRs. 81,980 on per ha basis. The overall benefit cost ratio of rice seed production was found 2.04 and the BC ratio was higher in Bardiya district (2.15) as compared to Chitwan (1.99) and Jhapa (1.97) reflecting rice seed production as profitable farming. The cost on organic manure, postharvest operation, seed and chemical fertilizer were found underused and could be increased by 387, 76, 75 and 74 percent respectively and In the other hand, the cost related to harvesting and micronutrient were found overused and could be decreased by 104 and 10 percent for optimal allocation of resources used in rice seed production. The optimal use of available resources and providing technical know-how with better delivery of extension services might lead on significant increase on rice production and making rice production as profitable enterprise which ultimately contribute to meet the domestic demand and lowering high rice import.