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The study aims to examine the nexus between reward system and service delivery of librarians in federal universities in Southwest Nigeria. Descriptive survey design was adopted for this study and the population consisted of 120 librarians in six federal universities in Southwest Nigeria. The total enumeration technique was adopted in the study. Questionnaire was the instrument used for data collection. The data was analysed using descriptive statistics of frequency counts, simple percentages, mean and standard deviation while inferential statistics of Pearson’s Moment Product Correlation and regression were used to test the hypotheses at 0.05 level of significance. Findings showed that usage statistics 3.04), current awareness 3.02), virtual reference services 2.88), information literacy 2.82), Internet/E-mail services 2.77) and online/CD ROM and Database searching 2.70) were some of the services delivered by the librarians. The major reward systems for librarians were: satisfaction of job security 3.08), giving annual leave allowance 2.85) and good remuneration 2.50). The major challenges encountered by librarians included lack of financial support to buy library materials as a result of low budgetary allocations to the development of libraries, inadequate promotional activities, low pay scale and limited opportunities for promotion. Reward system enhanced service delivery by librarians in the universities in Southwest Nigeria. Librarians should therefore, be treated fairly without any feeling of bias regards to their recognition and promotion opportunities by their employers as this would enhance good service delivery.