This paper examines security challenges and the implications for business activities in Nigeria. The paper seeks to determine the implications of security problems on the business operation and investment in Nigeria. The study adopts the Democratic Peace Theory. Secondary data was mostly used in the study. The study identifies the root causes of insecurity in Nigeria which has hindered business activities and some Security challenges confronting Nigeria was also highlighted. Security challenges in any environment constitute threat to lives and properties, hindered business activities, and discourage local and foreign investors, which effect and retards socio-economic development of a country. The study recommends effective formulation and implementation of policies capable of tackling the root causes of insecurity in Nigeria, such as Ethno-religious conflict, weak security system, systemic and political corruption, unemployment, among others.