The focus of this paper is on fiscal federalism and its effects on national integration in Nigeria. The paper was aimed at explaining the nature of fiscal federalism in Nigeria and the relationship between fiscal federalism and national integration. The theoretical framework for the paper was the Public Goods Theory. The historical/descriptive analytical approach was the method of the study which relied largely on secondary sources of data collection, such as journals, textbooks, internet and newspapers. The recommendation of the paper among others is that the lasting solution to the problems confronting Nigeria‟s fiscal federalism lies in the readjustment of the tax revenue sharing power of the federation in an equitable manner among the component units which currently angle in favour of the federal government. Conclusively, the paper states that a united country and people are in a better position to ably confront its crises of development, nationhood and stability if there is truly fiscal federalism. National integration is a serious and purposeful endeavour, the failure of which has grave consequences to any nation.