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The importance of the reference section in any library cannot be overemphasised because it reflects the functionality of the library. Global trends in technology have opened doors of opportunity for the reference section to serve its users better through the use of online assistive technologies, expert systems, and other artificial intelligence techniques. To this end, this study focused on the challenges and prospects of reference services in Federal Academic Libraries in the Southwest of Nigeria. Using the descriptive survey design, questionnaire was administered through google forms for data collection on Reference section staff from the University of Ibadan, Ibadan, Oyo State, Obafemi Awolowo University, Ile Ife, Osun State and University of Lagos, Akoka, Lagos. The result revealed that face-to-face consultation was the most used medium for reference service delivery while chatbots and web referencing are not used in these libraries; an indication that libraries in Nigeria are far behind in harnessing abounding opportunities for improved reference services. The study recommended that libraries should look toward adopting innovative technologies to enhance the provision of reference services in their libraries.