The study has identified the areas of strengths and weaknesses in the current use of Computer Based Learning (CBL) tools in Open and Distance Learning (ODL) institutions in Nigeria. To achieve these objectives, the following research questions were proposed: (i) What are the computer-based learning tools (soft and hard ware) that are actually in use in ODL institutions in Nigeria?, (ii) What are the perceived computer literacy and competency levels acquired through CBL among students of ODL?, (iii) What is the instructors' perceived effectiveness of computer-based instructional delivery in ODL in Nigeria and, (iv) what are the barriers to CBL applications?. The study adopted a descriptive survey design. Computer-Based Learning Questionnaire was used for data collection. Descriptive statistics of percentage was used for the analysis. Sample population of one thousand, sixty students and sixty staffs were selected for the research. The research specifically identified e-blackboard, Moodle and i-learn are the computer-based learning tools that were actually in use in ODL institutions in Nigeria. Intermediate and advanced computer literacy levels were identified as the self-perceived computer competency skill levels of ODL students in Nigeria. The most self-perceived effective computer applications among the instructors of ODL in Nigeria as identified by this research were for teaching, assessing students' performance across various fields of study, maintaining and tracking students' performances through Learning Management System. The research also identified the non-ownership of computer devices with internet facility, slow internet connectivity and limited access to computer, as the most difficult challenges to effective computer-based learning among the students of ODL in Nigeria and therefore recommended ways of averting these challenges, but proffered precautionary measures to be taken while using CBL for counseling.