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This paper highlights the development of University education vis-à-vis the emergence and development of digital libraries in Nigeria Universities with specific reference to Northwest Nigeria. The concepts of digital library and as well its objectives in a university system, and services provided such as network services, digital preservation and quick reference were discussed. In addition prospects and benefits of digital library services like digitization of local content, access wide range of services and scholarly publishing among others were identified. The paper highlighted funding, infrastructure and technology as challenges facing the application of digital libraries in northwest Universities and concludes that, though they are faced with numerous challenges, however, the university libraries could gradually overcome such challenges in the course of time especially through library collaboration. Finally the paper recommends that the virtual library project of the Nigerian University Commission (NUC) should be well funded and managed to support the digital Libraries in various Universities. Also, there is need for CULNU to ensure a unify method of linking Nigeria University Libraries together through a particular network, among others.