This study examines the effect of external debt service on economic growth of Nigeria. For a developing country like Nigeria that is faced with scarcity of capital to grow economically, there is the need to borrow abroad to supplement domestic savings. Nigeria has been experiencing manifestation of the adverse effects of external debts which are low capacity utilization which results to low production, backward technology, high and chronic unemployment rate, high dependence on oil production and export of primary products which has led to decrease in economic growth over the years. In view of this, the study is aimed at assessing the effects of external debt on economic growth of Nigeria. The study also examines external debt trend of Nigeria and the effect of macroeconomic variables on external debt in Nigeria. The study relied on time series data which was gathered from CBNstatistical bulletin. Co-integration and test and error correction model were used as the estimation technique. The study showed thatincrease in external debt has a drastic negative effect on Gross Domestic Product (GDP) and that increase in external debt can discourage private investment and alsomacroeconomic variables can lead to external debt. The study recommended among others that the economic reform must target macro-economic stability, removal of structural distortions and creation of conducive environment for enhancing domestic production capacity.