The study evaluated the effects of monetary policy on price stability in Nigeria for the period 1981-2016. The consumer price index was used as the dependent variable while money supply, interest rate, exchange rate, Gross Domestic Product (GDP) and treasury bill rates were the independent variables. The research made use of secondary data obtained from Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators. The study employed Auto Regressive Distributive Lag (ARDL). The unit root test showed that all the time series data were not stationary series. The result showed in the short-run and long-run, exchange rate, money supply, GDP and open market operations have significant effects on price stability in Nigeria while interest rate is significant only in the short-run. Based on the findings, the study recommended among others, that Central Bank of Nigeria increase interest rates during inflation in order to control money supply and consequently inflation. Government should take policy actions swiftly so as to reduce lag problems. Also, monetary policy alone cannot be used to maintain price stability. It should, therefore, be supplemented by fiscal measures, non-monetary and non-fiscal measures.