The purpose of this study was to determine the influence of demographic and institutional factors on utilisation of online library services by distance learners of the University of Nairobi. Specifically, the study aimed at achieving an objectives: viz. assess the extent to which learners‟ computer literacy influences utilisation of online library services. The study was anchored on the positivist research paradigm. Descriptive survey and correlation research designs were adopted for this study. Data were collected using self-administered questionnaires and interview schedules. The target population consisted of 1671learners in the School of Open and Distance Learning and 14 librarians found in the University of Nairobi namely Kikuyu Campus, Chiromo Campus and the main library Campus (The Jomo Kenyatta Memorial Library). The sample size was 312 respondents. A pre-test study was conducted using 31learners and 1 librarian. This constituted 10% of the study sample. The researcher tested for the inter-item reliability of the instruments using Cronbach‟s Alpha and results ranged from 52.5%-95.8% for learners‟ questionnaires while that of librarians recorded 69.8%.Data analysis were done using frequency counts, the mean and standard deviation while hypothesis was tested using multiple linear regression analysis; one way analysis of variance at0.05 level of significance. The key finding indicated a significant relationship. The finding indicated no significant relationship between computer literacy and utilisation of online library services at (r = 0.234, R2 = 0.055, n=259, ρ<0.05). However, one factor, learners‟ computer literacy had no influence on utilisation of online library services. The study recommends that all distance learners irrespective of their gender and age should be enlightened to use online library services provided by the University of Nairobi. The outcome of this study may act as basis for policy formulation for both the University of Nairobi and the government of Kenya regarding Distance Learning Programmes. Further research may be carried out to ensure that these demographic and institutional factors are tested in other study samples found in other public universities in Kenya.