The study examined the relationship between educational resources allocation and effective diversification of Nigerian distance education. A descriptive research survey design of correlation type was used for the study. The population of the study consist of centre managers, course facilitators, students representatives, centre desk officers, state Education officers, state Accountants. Stratified random sampling technique was used to select 750 respondents for the study. Four research questions and four research hypotheses were generated for the study. The research instrument used to collect relevant data was “Educational Resources for Nigerian Distance Education Diversification Questionnaire. (ERNDEDQ). Face and content validity of the instrument was assured by the distance education and Resources management experts. Test-retest reliability method was used to ascertain reliability index of 0 .73 using spearman ranking order statistics analysis. All the research questions were answered using mean scores, while research hypotheses were tested using Pearson product moment correlation statistics and tested at.05 significance level. The findings of the study revealed that: high significant relationship exist between financial, human and physical resources and effective diversification of Nigerian distance education towards policy formulation, societal needs and challenges. It was however recommended that stakeholders should ensure that necessary educational resources needed for effective diversification of Nigeria educational system should be adequately allocated to the various educational institutions.