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This thesis studied the nature and consequences of close intergroup contact in Nigeria. Chapter 1 provides a background to intergroup relations between the ethno-religious groups in Nigeria. Chapter 2 provides an introduction to the theoretical framework, which is the intergroup contact hypothesis (Allport, 1954), with special emphasis on the role of friendship in intergroup contact research. The chapter addresses the possibility that negative intergroup contact exacerbates prejudice and outlines the role of indirect forms of intergroup contact, namely extended contact (Wright, Aron, McLaughlin-Volpe, & Ropp, 1997), vicarious contact (Mazziotta, Mummendey, & Wright, 2011), and imagined contact (Crisp & Turner, 2009) in prejudice reduction. Indirect forms of contact have been suggested as alternatives to direct contact, if no or only limited direct contact opportunities are available. All empirical studies in this thesis were conducted in south-west Nigeria with respondents who belong to the Yoruba majority group. The target groups were Hausas, Edos, and Igbos (minority groups in the area). Chapter 3 consists of two repeated measure studies (Studies 1 and 2) which compare the quality of in-group (Yoruba and Yoruba) and cross-group (Yoruba and Igbo) friendships. The findings showed that, provided the duration of friendship is controlled for, cross-group friendships are rated as largely similar in quality and closeness to in-group friendships, fulfilling key functions of friendship. Chapter 4 consists of two cross-sectional studies (Studies 3 and 4) which tested the secondary transfer effects from direct and extended cross-group friendships. The findings showed that direct and extended cross-group friendship with Igbos was associated with more favourable attitudes towards Hausas. The studies showed for the first time that extended cross-group friendship yields secondary transfer effects. Chapter 5 focuses on the effects of positive and negative intergroup contact with Igbos on out-group attitudes (Study 5). It was shown that negative intergroup contact had an effect on attitudes over and above the effect of positive contact. As expected, positive contact with Igbos was associated with more favourable attitudes towards Igbos, and negative contact with Igbos was associated with less favourable attitudes towards Igbos. Additionally, Study 5 showed secondary transfer effects of negative intergroup contact. Chapter 6 contains a multilevel-study (Study 6) which explores the effects of roommate diversity (i.e., having at least one Igbo roommate) on out-group attitudes. Roommate diversity was linked to more positive attitudes towards Igbos, the roommate’s ethnic group. Moreover, it was shown that contact with Igbos was associated with more positive attitudes towards Edos and Hausas on the within-level. On the between-level roommate diversity was associated with more positive attitudes towards Egos. Chapter 7 summarizes the key findings of the studies and discusses theoretical and practical implications of the research.