Nepal’s second-largest city has been rapidly growing since the 1970s, although its valley has been affected by rare, catastrophic floods in recent and historic times. We analyse potential impacts of such floods on urban areas and infrastructure by modelling 10 physically plausible flood scenarios along Pokhara’s main river. We find that hydraulic effects would largely affect a number of squatter settlements, which have expanded rapidly towards the river by a factor of up to 20 since 2008.