Indiscriminate use of pesticides in vegetable farming is an emerging problem resulting in increasing health and environmental risks in developing countries including Nepal. As there are limited studies focusing on farmers’ and retailers’ knowledge related to pesticide use and associated risks as well as safety behaviour, this study assesses their perceptions of pesticide use, associated impacts on human and environmental health and safety behaviours. This study is also intended to quantify pesticide use in vegetable farming. We used the Health Belief Model (HBM) to evaluate farmers’ and retailers’ safety behaviour associated with pesticides. We interviewed 183 farmers and 45 retailers. The study revealed that farmers applied pesticides at an average of 2.9 kg a.i./ha per crop per season; and insecticides, especially pyrethrins and pyrethroids as well as organophosphate, were the most frequently used. Retailers were more aware of the threats surrounding pesticide use and were thus more aware of the risks to their own health as well as to the health of animals, birds, fishes, and honey bees. Headache (73.8%) was the most commonly reported acute health symptom of pesticide use. Farmers often did not adopt the appropriate safety measures when handling pesticides sighting the constrained perceived barriers (direct path coefficient, DPC = −0.837) such as feeling uncomfortable and the unavailability of safety measures. Likewise, retailers lacked the incentive (direct path coefficient, DPC = 0.397) to adopt the necessary safety measures while handling pesticides. Training and awareness programs addressing safe handling practices and safety measures as well as education concerning the long-term risks of pesticide exposure on health and the environment, through radio, television and posters, may improve the safety behaviour of farmers and retailers.