Thousands of Nepalis walked in procession through the Kathmandu valley Sunday in a festival to commemorate the dead, which many mourning family members who died in a devastating earthquake.

The 7.8-magnitude quake on April 25 killed nearly 8,900 people and reduced some 600,000 houses to rubble across the impoverished Himalayan nation.

The annual Gai Jatra festival, which dates back to the 17th century, pays respects to those who have died in the past year, with their families staging colourful processions through town centres.

These are traditionally led by a cow or by young men dressed in white with headgear depicting a cow.

Loud devotional songs played in the earthquake-ravaged palace square in Kathmandu as thousands paraded with photographs of loved ones. The aroma of incense sticks filled the air.

Among them was 31-year-old Bijay Darshan who walked through the crowd holding a large photo of his family members, buried when the earthquake toppled his five-floor rented house.

"I lost five from my family, including my nine-year-old daughter. I am walking for them today," Darshan told AFP.

"There is a strange solace in walking with so many others bereaved like us," Darshan, a tailor, added.

Many were lined up along the crowded route with sweets, milk, money and fruit, offering them to the children leading the procession.

"This is a spiritual walk. My daughter's face is flashing before my eyes as I pray for her," said Radhika Napi, 45, whose 24-year-old daughter and grandson died in the quake.

The festival began after Kathmandu's king Pratap Malla, in a bid to console his queen over their son's death, urged his subjects to stage a procession if they had also had a death in their family that year.