In 1954, the Nigerian founding fathers opted for a federal system of government despite its inherent challenges in a pluralistic society. This research work x-rayed federalism in Nigeria as the only basis upon which Nigeria can remain united despite its diversity and peculiar conditions in which the different tribal groups live in and proffers solutions to the challenges of the practice of federalism in Nigeria. The greatest problem of federalism in Nigeria today is the general problems of the true nature of the federal relationship as manifested in the intense rivalry and confrontation between the Federal and State Governments. This work recommends that the calls for the restructuring of federalism in Nigeria under the 1999 Constitution (as amended) should be implemented and federalism demands of them co-operation with one another in order to promote the welfare of the people through their combined powers.