Religious fundamentalism has become one of the most significant challenges confronting peaceful coexistence, national integration, and sustainable development in contemporary Nigeria. While religion remains a powerful force for moral formation, social cohesion, and humanitarian service, extremist interpretations of religious beliefs have contributed to violence, intolerance, social polarization, and insecurity in different parts of the country. This paper critically examines the nature of religious fundamentalism and its implications for peaceful coexistence within Nigeria's pluralistic society. Employing a qualitative research methodology based on documentary and library sources, the study analyses scholarly literature, constitutional provisions, and relevant theological perspectives on religion, peace, and social harmony. The paper argues that religious fundamentalism is not synonymous with religion itself but represents an extreme ideological interpretation that undermines the core religious values of justice, compassion, tolerance, and respect for human dignity. It further contends that political manipulation of religion, poor civic education, socio-economic inequalities, digital misinformation, and weak institutional responses have intensified religious extremism in Nigeria. The study concludes that promoting interfaith dialogue, ethical leadership, constitutional governance, responsible religious education, and effective law enforcement remains essential for reducing religious extremism and strengthening peaceful coexistence. It recommends collaborative efforts among government, religious institutions, educational establishments, civil society organisations, and community leaders to foster a culture of tolerance, mutual respect, and national unity.