The paper seeks to examine landholding system under customary law. It shall explore the intricacies of the land tenure system under the Nigerian customary law concerning the provision of the Land Use Act. In spite of the confusion the Land Use Act brought on the customary land tenure system such that there was uncertainty as to the existence or abolishment of the customary law land tenure system by the Act; the paper finds that customary land tenure system still exists under the present national land tenure system, albeit modified. paper finds as well that notwithstanding the unlimited jurisdiction customary courts and area courts have over land matters in the rural areas, the jurisdiction of the customary court of appeal to entertain all appeals from the customary and area courts is limited consequent: its competence to only handle appeals arising from question of customary law and the provision of Section 272 of the 1999 Constitution that grants state high courts unlimited jurisdiction to hear and determine any civil proceeding. The paper recommends for the amendment of the Land Use Act to bring it in line with the reality of the custom of the populace, in order to have a clear and not confusing land tenure system. Furthermore, there is need to expand the jurisdiction of the Customary Court of Appeal to enable it handle all appeals from the customary courts and area courts because what might happen is that most cases would go straight to the state high courts. The customary courts are the machinery through which Nigerian customary law can develop to such heights as the English Common Law. Where the courts are denied the support needed to achieve this goal, is there hope for the growth and development of the Nigerian customary law?