This dissertation explores the relationship between ethnicity and nation-building and nationalism in Nigeria. It is argued that ethnicity is not necessarily incompatible with nationalism and nation-building. Ethnicity and nationalism both play a role in nation-state formation. They are each functional to political stability and, therefore, to civil peace and to the ability of individual Nigerians to pursue their non-political goals. Ethnicity is functional to political stability because it provides the basis for political socialization and for popular allegiance to political actors. It provides the framework within which patronage is institutionalized and related to traditional forms of welfare within a state which is itself unable to provide such benefits to its subjects. Ethnicity as identity and as pragmatic pursuit of economic and political advantage are, therefore, the routes to the political centre and so contribute to the legitimacy of the state. Nationalism is functional to political stability because it legitimates state power. However, as an elite ideology to legitimate the control of state power and struggles for it, nationalism articulates ethnicity and destabilizes the society, creating an identity crisis for individuals and communities. As the people increasingly resort to religion to correct their identity crisis, new political actors arise to challenge the existing order, using established religious ideologies to criticise and challenge the oppressive structure of elite-led secular nationalism. The Nigerian experience demonstrates that nationalism is best understood as a result of a continuous tradition in which legitimation claims of a social order are sustained and challenged rather than the result of modern industrialization