During the first phase of the COVID-19 pandemic, some media content in Nepal tended to create moral panic and public fear towards specific sub-groups in the population. This study explored the content published in the mainstream and social media for their role in creating public fear and stereotypes which were particularly focused on returnee migrants and Muslim populations living in Nepal and the subsequent impact on these population groups. The contents of three national daily broadsheet Nepali language newspapers, three Nepali online news portals and top YouTube videos by views were analysed for COVID-19 related coverage on Nepali Muslim populations and returnee migrants and published between January 1 and July 31, 2020. Data were analysed using a thematic approach. We identified a total of 56 relevant news items from daily newspapers, 35 items from online news portals and 18 videos from YouTube. Broadsheet newspapers tended to cover relevant issues of returnee migrants whereas online news portals published Muslim populations related issues more than the returnee migrants. Six themes emerged from our analyses: (i) Moral panics: stereotypical perception in the media; (ii) Societal response: stigma, fear and panic responses in the community; (iii) Inadequate and inappropriate government actions; (iv) Othering practices: discrimination, stigmatisation against returnee migrants and Muslim populations (v) Health care access and treatment of returnee migrants; and (vi) Response and resilience from the Muslim community. We conclude that the Nepali media tend to depict returnee migrant workers and Muslims living in Nepal as COVID-19 spreaders and a threat to the community for transmission of virus. There is an urgency for media professionals to accurately report on health issues. Health professionals and health promoters can play a significant role in delivering health promotion-related messages and tackling any misinformation using both mainstream and social media.