DHIS2 is a web-based platform primarily used in developing countries, ensuring reliable data and aiding decentralized decision-making. The Ministry of Health and Population has greatly emphasized using DHIS2 for data entry and reporting. However, studies regarding health workers' experiences on DHIS2 and the utilization of data at the local level remain limited. Therefore, this study aims to investigate the usage and practical experience of DHIS2 at the local levels of Gandaki province, Nepal. An exploratory qualitative study was conducted in the Gandaki province from February to August 2023. We conducted twenty in-depth interviews among the DHIS2 users at local levels, health posts, and provincial health directorate using in-depth interview guidelines. The study participants were selected purposively. Thematic analysis was conducted to analyze the data, and NVivo was used to facilitate data analysis. Health professionals demonstrated dedication and commitment to use DHIS2 for reporting. DHIS2 has facilitated timely reporting, data storage, data analysis and visualization, feedback and communication mechanisms, and service delivery. Users' self-motivation and support from the local and provincial levels and regular review and program-specific review meetings were major facilitators for DHIS2 use. Similarly, technical issues, poor internet connectivity, power outages, and inexperienced health professionals were the significant challenges to using DHIS2. The basic and refresher training needed improvement at all levels, and learning materials were unavailable in health facilities. In addition, the data utilization at the local level in various actions was unsatisfactory despite sufficient data. Health professionals have been facilitated by DHIS2 in various actions. Capacity building of health professionals on data analysis and interpretations, continued onsite coaching, reliable internet connectivity, availability of learning materials, and improved server capacity are needed to enhance the performance of DHIS2 at the local level.