This study examines the impact of ethical behavior on employee performance in Nepalese commercial banks. Based on primary data, the study examined relations of ethical behavior with employee performance in the sample banks. Structured questionnaires on quantitative data were used to gather data from 150 respondents selected by using the random sampling method. The regression model was used to test the significance and effect of ethical behavior on employee performance in Nepalese commercial banks. The correlation and regression results of the study have shown teamwork and leadership style, reward and punishment, discipline having positive impacts on employee performance. However, the results show racial discrimination related negatively to trigger low employee performance in the commercial banks of Nepal. Similarly, corruption has a negative impact on employee performance. In this way, the study argues significant relations and impact of ethical behaviors on employee performance in conclusion.