For many centuries, intergenerational literacy learning outside formal educational institutions has been an important part of everyday family life in Nepal. Yet, educational policy continues to focus on promoting 'schooled' approaches to literacy for both adults and children, overlooking informal learning and indigenous literacy practices in many communities today. Through exploring intergenerational religious literacy learning in Nepal, this paper develops new understandings of 'family literacy' and proposes how these could be integrated into current educational policy. Ethnographic-style research was conducted with families in a Muslim community, where teenage girls were teaching Urdu literacy to siblings, and in a Gurung community where intergenerational learning had become central to the development of Tibetan Buddhist texts. In these two communities, literacy was viewed as collaborative as well as individual, helping to shape shared identities, languages and values, and challenging instrumental notions of functional literacy that underlie much national and international policy.