Abstract The trade in medicinal plants for herbal remedies is large and probably increasing. The trade has attracted the attention of scientists and development planners interested in the impact on plant populations and the potential to improve rural livelihoods through community based management and conservation. This has resulted in a large number of publications and development activities, ranging from small NGO projects to new government policies. Through a review of 119 references from Nepal, 4 common assumptions regarding the medicinal plant collection and trade have been identified: I. The commercial medicinal plant resource base is becoming ever more degraded as a consequence of collection; II. The medicinal plants are an open-access resource; III. Cultivation can contribute to conservation of commercially collected medicinal plant species; and IV. Medicinal plant harvesters are cheated by middlemen. The frequency of the assumptions is documented, their empirical support is evaluated, and the consequences of their presence for conservation and rural livelihoods are discussed. It is concluded that the empirical backing for the assumptions is weak, and that some reviewed references use logically flawed argumentation. It is argued that the assumptions are leading to misguided conservation efforts, and an inclusive approach to conservation of commercial central Himalayan medicinal plant species is briefly outlined. Electronic Supplementary Material Supplementary material is available in the online version of this article at http://www.dx.doi.org/10.1007/s10531-006-9039-4 and is accessible for authorized users.