Nigeria is the most populous country in Africa, with considerable number of Muslim population. Before the emergence of Islamic banking in Nigeria, the conventional banking system was the only medium of financial transactions, which survives on interest, breeds uncertainty and multiplies speculation, all for profit. Consequent upon economic turmoil and financial crisis in the Western European countries, which had its origin in the United States mortgage crisis in the late 2007, the Islamic system of banking and finance became the only option for the survival of financial system across the globe and Nigeria happened to be among other countries in the world adopting Islamic banking due to its suitability in despising interest and denouncing speculation, with emphasis on resource mobilization for active partnership with entrepreneurs and real sector operators of the economy. This paper therefore investigates the opportunities and challenges of Islamic Banking in Nigeria with a view to offer policy suggestions to the government. The objective of this study is to identify such opportunities and challenges with particular reference to JAIZ International Bank Plc. The study uses secondary data and adopts descriptive method to outline these challenges and determine their causative factors. The major findings of this study are:1) religion, manpower and moral hazards significantly impaired the operations of Islamic bank: 2) competition with conventional banks is a major setback to Islamic banking in Nigeria. Despite challenges, Islamic banking in Nigeria offers a huge investment opportunities to domestic and foreign investors in Nigeria if all hands should be on deck to re-strengthen the capital base of the Islamic bank in the country. The paper therefore concludes with suggestions on serious measures to be taken to revitalize the Islamic banking in Nigeria.