The Babai River (Nepali: बबई नदी) originates in and completely drains Inner Terai Dang Valley of Mid-Western Nepal.

Dang was anciently home to indigenous Tharu people and came to be ruled from India by the House of Tulsipur who also counted as one of the Baise Rajya (Nepali: बाइसे राज्य)—a confederation of 22 petty kingdoms in the Karnali (Ghagra) region.

Since Dang Valley was somewhat higher, cooler, better-drained and therefore less malarial than most of the country's Inner Terai, it was settled to some extent by Shah and Rana courtiers and other Paharis long before DDT was introduced to control the disease-bearing Anopheles mosquito.

Sharada Khola drains about half of Salyan's larger Middle Hills region before cutting through the Mahabharat Range and joining the Babai from the right.

In Season 9, Episode 55 of the television series River Monsters, Jeremy Wade visits Bardia National Park to fish the Babai.