The paper examined the nexus between identity-based conflict and the development challenge in Nigeria's Fourth Republic. The study was informed by the increasing disjointed loyal relationship between the citizens and the nation, which has adversely impacted on the country’s socio-political and economic advancement. Using the descriptive-analytical method, the study adopted triangulation methods of data gathering techniques. 3,600 copies of a questionnaire titled ‘identity conflict and development challenge in Nigeria’s Fourth Republic’, which was administered in the six geopolitical zones of the country using a combination of the random and purposive sampling methods to select the study areas. Two hypotheses were tested using the statistical tool of simple percentages and the Spearman Rank Correlation Coefficient at 5% significance level. The study adopted the Political Economy paradigm as its theoretical construct. The study unravelled a significant linkage between identity-based conflict and Nigeria’s development challenge. Second, the study unravelled that identity conflicts have adversely impacted on the socio-economic development since Nigeria’s Fourth Republic. The study, therefore, amongst others recommends national dialogue, that will facilitate peaceful coexistence in Nigeria.