A great deal of comments have been made on the controversies surrounding federalism as an effective system of government that an evaluation of the basic theory of the concept is necessary in order to appreciate its appeal as a system of government, despite these controversies. This study, therefore, attempted to assess the contemporary relevance of federal solution in Nigeria. Secondary sources of data were employed for this research. The study revealed that federal system is not a panacea for the disease of cultural diversity, but in many situations it may be necessary as the only way of combining, through representative institutions, the benefits of both unity and diversity. It was therefore recommended that federal solution is still relevant in Nigeria but the arrangement should be made more equitable.