Foreign Direct Investment (FDI) had accounted for the largest share of total capital inflows in Nigeria even though its impact on economic growth had been minimal. Findings from extant studies on the nexus between FDI and economic growth were mixed. Some studies found that FDI raised economic growth in recipient countries, while others argued the reverse. However, the contributions of FDI have been argued to depend strongly on key factors such as trade openness, human capital development and financial development in the recipient countries. Financial development was key as it provided access to external finance and better allocation of funds to domestic firms. Most studies had used bank-based measures of financial development with less attention to the market-based aspect of the financial system. Therefore, this study provided new evidence on the impacts of FDI on economic growth and examined the moderating role of financial development using both bank-based and market-based measures between 1990 and 2022. Dynamic Ordinary Least Square (DOLS) was the estimation technique. The findings showed that even though both FDI and measures of financial development had negative effects on economic growth without interaction, the interactions between FDI and financial development had a positive effect on economic growth. FDI and financial development had positive significant effects on growth when FDI was augmented with financial development irrespective of the measures of financial development. This, therefore, supports the theory that says the presence of absorptive capacities such as financial development enhances the effects of FDI on growth. Based on these findings, government through the Central Bank should embark on a policy to enhance the level of financial development in the economy. This will go a long way in achieving the positive effect of FDI on Nigeria’s economic growth.