ABSTRACT This research study was carried on the impact of exchange rate fluctuation on foreign direct investment in Nigeria. The fluctuation frequency and instabikty of the exchange rate movement since the beginning of the floating exchange rate rIse a concern about the impact of such movement on foreign direct investment. The research was carried out under the following broad and specific objectives: to determine impact of exchange rate fluctuation on foreign direct investment in Nigerian and to examine the effect of inflation rate on foreign direct investment. Multiple r3gression analysis technique was employed in analyzing the hypothesis using e-view statistical software. The study reveals that Exchange Rate is positively related to Foreign Direct Investment while Balance of Payment and Inflation were negatively related to FOL The variables are significant with t-statistics: EXR (4.33) is significant at 1%, BOP (-2.26) significant at 5% except for lNF (-0.12) which is insignificant. The significant relationships of these variables reflect their potency as important conduit in transmitting monetary policy impulses in attracting Foreign Direct Investment for the growth of the aggregate economy. The researcher concluded that exchange rate fluctuation and inflation rate have significant effect on foreign direct investment in Nigeria. Therefore it was recommended among others that since neither the freely flexible exchange rate regime nor the fixed exchange rate regime is ideal for any economy, a mixed exchange rate policy should be adopted. In fact, access should be made without unnecessary bottlenecks, protocols, and bureaucracy for users and investors to get foreign exchange, as this would boost investments, hasten production, and ensure confidence in the economy.