According to World Watch Monitor (WWM), the three women and one man were jailed for five years each after being found guilty last December of "witchcraft, forceful imprisonment and violence".
Reacting to the release of the group - which had been behind bars for nine months - the Federation of National Christian, Nepal was quoted by WWM as thanking a court for "setting free our innocent people".
Previously, a local court in the western district of Salyan heard how a mentally ill woman was sent by her father-in-law to a church to receive healing prayer for alleged demonic possession.
Husband and wife Ruplal and Ganga Pariyar were arrested along with Lali Pun and Bimkali Budha after the alleged victim left the church midway through the service before later being found shouting and self-harming.
Their convictions came despite the alleged victim's husband insisting the four Christians had done nothing wrong and the woman herself claiming their prayer had healed her. Under Nepal's 2015 constitution, proselytism is illegal.
The four were detained on the account of a businessman given one month after the incident.
Local church leaders claimed the arrests were religiously motivated.