Introduction The study aimed at exploring the adverse events following immunization (AEFI) and their incidences among health workers in three different districts of central and western Nepal following the first dose of Covishield vaccine,. It also aimed at studying the association of AEFI with demographic and clinical characteristics of vaccinees, pre-vaccination anxiety level and prior history of COVID-19 infection (RT- PCR confirmed) status. Materials and methods This was a cross-sectional study carried out via face-to-face or telephonic interview among 1006 health workers one week after receiving their first dose of the Covishield vaccine. Incidence of adverse events was calculated in percentage while Chi-square Test was used to check the association of AEFI with independent variables. Logistic regression was used to find out the adjusted odd’s ratio at 95% CI. Results Incidence of AEFI was 79.8% with local and systemic AEFI being 68.0% and 59.7% respectively. Injection site tenderness was the commonest manifestation. Local and systemic symptoms resolved in less than one week among 96.8% and 98.7% vaccinees respectively. Females were more likely to develop AEFI than males (AOR = 1.7, 95% CI = 1.2–2.4). Vaccinees aged 45–59 years were 50% less likely to develop AEFI as compared to those aged less than 30 years (AOR 0.5, 95% CI = 0.3–0.8). Most of the vaccinees had not undergone RT-PCR testing for COVID-19 (59.8%). Those who were not tested for COVID-19 prior were 1.5 odds more likely to develop AEFI compared to those who were negative (AOR = 1.5, 95% CI = 1.1–2.1). Conclusion More than two-third of the vaccinees developed one or more forms of adverse events, but most events were self-limiting. Females and young adults were more prone to develop AEFI.