BackgroundPerformance-based financing (PBF) is the transfer of the financial and material goods required for taking measurable actions or achieving a predetermined performance target and is an innovative method targeted at strengthening weak health systems in low-and medium-income countries. Methods A descriptive, cross-sectional survey was conducted on a representative sample of health workers in public primary and secondary health facilities that are implementing PBF in Nasarawa State using both qualitative (key informant interviews) and quantitative methods (structured questionnaires). 315 respondents were selected using a multistage sampling technique. In addition, eight key informants (purposively selected from the selected healthcare institutions) were interviewed. ResultsOf the respondents, 159 from the primary health facility submitted that PBF is effective, 41 described the method as poor while 101 saw the method as being good. The interviewed key informants noted that PBF has made a positive impact in the case of infrastructure, staff motivation and, consequently, service quality. Major challenges identified were with implementation of PBF due to poor infrastructure, inadequate manpower, poor funding and delays in the payment of subsidies to health facilities. Conclusion Despite the plethora of challenges militating against the effective deployment of PBF, the method has made a significant positive impact on the state of the health care facilities in Nasarawa state. We recommend adequate funding, regular manpower training and development for enhancing the state of the healthcare facilities in the state.