Despite the huge defense expenditure by Nigeria, internal conflicts brought about by political unrest and terrorism activities keep rising unabated. Against this backdrop, this study examined the interaction effect of defense spending and political stability on Nigerian economy using a quarterly timeseries data between 1996 and 2023. This period coincides with the period of significant increase in defense spending as well as major regime change (from Military to Civilian rule). The data were analyzed using Dynamic Ordinary Least Square (DOLS) estimator. Results from DOLS show that both defense spending and political stability have positive influence on economic growth with only defense spending being a significant factor. The interaction between defense spending and political stability wields a significant positive impact on economic growth; implying that in the presence of political stability, defense spending improves economic growth. Based on the above, this study recommends that government should improve and sustain her defense expenditure levels as it will enhance security of life and properties while political actors, and other relevant stakeholders such as the electoral umpire, political parties including the judiciary, work harmoniously and hand-inhand to ensure stable political environment at all times.