The Panchthar–Ilam–Taplejung Corridor in Eastern Nepal, managed through community forestry, is a crucial habitat for the Himalayan red panda, an endangered carnivore threatened by forest degradation and illegal trade. We deployed the altitude line intercept and ten-tree plotless methods to evaluate the distribution of Himalayan red pandas and the environmental factors affecting them within four community forests, namely Singhadevi, Chitre-Hile, Chhipchhipe, and Kalikhop-Dadehli, of the corridor. We established a total of 23 transects and 92 plots, identifying 41 plots with evidence of the Himalayan red panda’s presence. The sign occurrence revealed a clumped distribution of the species across all four community forests. The Himalayan red panda signs were observed between 2200 m and 2700 m above sea level (asl) and the majority of them were from habitats with a moderate slope within elevations of 2400 m to 2500 m asl. The primary sites for the defecation were large horizontal tree branches (78.12%), followed by forest ground (15.62%) and rocks (6.25%). The dominant tree species in their habitats included Lithocarpus pachyphylla (Importance value index, IVI = 45.05), Symplocus theifolia (IVI = 37.19), Symplocos pyrifolia (IVI = 20.99), Quercus lamellosa (IVI = 19.25), and Magnolia campbellii (IVI = 17.25). Among the thirteen environmental variables examined, proximity to water, distance to road, bamboo density, and Normalized Difference Vegetation Index were identified as the major factors influencing the Himalayan red panda’s distribution. This research provides crucial insights to develop site-specific habitat management plans for community forestry.