The Constitution of the Federal Republic of Nigeria guarantees individual ownership of property. However, the same Constitution permits compulsory acquisition of land from the rightful owners provided it is made in accordance with the law. The Land Use Act 1978 is the principal statute regulating land management in Nigeria. This paper seeks to examine the effectiveness of the Land Use Act in regulating compensation for compulsory acquisition of land rights in Nigeria. Suggestions are proffered in the area of reformation of land rights with the aim of addressing perceived lapses in the law.