The process of oil extraction can be enhanced by dehulling, oil produced from groundnut seeds serve as a good source of protein, vitamin, fat, oil, and crude fibers. A groundnut dehulling machine was developed, having two dehulling rollers, rubber beaters, screen, blower unit, seed and chaff outlet. The separator unit has a centrifugal blower, screen and collecting tray. It’s powered by 3 hp electric motor, which transmits constant speed of 3636 rpm to the blower and 1000 rpm to rubber beaters. Groundnut used was at 7.32% moisture content (w.b). Dehulling was achieved through the compression and shearing action of the rotating dehulling roller against the stationary dehulling roller. The effect of dehulling roller clearance (6.5 mm,7.0 mm, 7.35 mm and 7.5 mm) and speed (700 rpm and 750 rpm) was evaluated on dehulling efficiency, machine capacity, mechanical damage and separation efficiency. The result obtained after testing the machine shows that 7.35 mm clearance and 700 rpm of the dehulling roller gave optimum average dehulling efficiency 95.80%, separation efficiency 81.40% and the least mechanical damage 11.01%. Machine capacity of 97.98 kg h-1. was obtained at 750 rpm and 7 mm dehulling roller clearance. The results obtained during evaluation was statistically analyzed, multiple linear model equations which are capable of predicting the effect of dehulling roller clearance and speed on dehulling efficiency, machine capacity, mechanical damage and separation efficiency was developed.