Chandra Bahadur Dangi stands just 21.5 inches tall - dimensions carefully measured by officials.
His height is two inches shorter than Filipino Junrey Balawing, the previous holder of the “world’s shortest man” title.
“I’m continually amazed that this record keeps getting broken,” Guinness World Records editor-in-chief Craig Glenday said, in the Nepali capital Kathmandu.
“Just when you think it’s impossible for the record to get any smaller, Mr Dangi comes along and astonishes us all."
Mr Dangi, who was orphaned at 12, said relatives used to display him at freak shows to make money for themselves.
He considered his height a curse after a lifetime of being ridiculed by neighbours and laughed at in the freak shows.
But life is set to change immeasurably for Mr Dangi, who lives alone in a remote valley in the Midwestern hills of the Jhapa district.