Research evidence shows that university industry collaboration presents a wide range of benefits to industries, higher institutions, and to the development of a nation. This study investigated the existence of university industry collaboration, the factors militating against the collaboration, and the extent to which university industry collaboration can reduce unemployment in Nigeria. A descriptive survey was adopted in the study. The study revealed that a weak relationship exists between the universities and industries in Nigeria. It was also revealed that university industry relationships significantly reduce the level of unemployment among graduates in Nigeria. In addition, lack of interest on the part of industries and lack of awareness of the importance of university industry relationship were the major factors militating against university industry collaboration. Therefore, strengthening university industry will create more industries and entrepreneurial businesses, thereby minimizing the rate of unemployment in the country.