Ram Bahadur Banjan, 16, disappeared on Saturday from a forest where he had been meditating for 10 months, during which his associates said he consumed no food or water.
On Sunday, Santaraj Subedi, a local official, said police, followers and family members were looking for the boy in the jungles of Bara, about 160km (100 miles) south of the capital, Kathmandu.
Gautam Raj Kattel, a police official, said some people said they saw Banjan walking south before dawn on Saturday. His clothes were found near where he had been meditating.
Banjan had been sitting cross-legged with his eyes closed in a niche among the roots of a tree in the jungle since 17 May 2005. Thousands of people had come to see him every day.
The area is known to have substantial numbers of communist rebels who have been fighting government troops for a decade. But Kattel said he doubted that the boy was abducted by the rebels or by local criminals. He said he believed that Banjan had just wandered off.
Some Buddhists say Banjan is a reincarnation of Gautama Siddhartha, who was born not far away in southwestern Nepal in about 500 BCE and later became revered as the Buddha.
Visitors have been allowed to view Banjan from a roped-off area about 25m away between dawn and dusk only. His handlers kept him from public view at night, when they would place a screen in front of him.
Buddhist priests who visited him said the boy was not the incarnation of Buddha, but believed that he had been meditating for months.
Buddhism teaches that right thinking and self-control can enable people to achieve nirvana - a divine state of peace and release from desire. Buddhism has about 325 million followers, mostly in Asia.
More information and links to resources about Banjan are available in this Wikipedia entry