Monetary policy remains a viable policy measures employed by every government to achieve economic stabilization goals. The effectiveness of monetary policies could be assessed based on the private sector performance and key macroeconomic indicators. Recent developments in the Nigerian economy particularly as it’s relate to constant increase inflation, dollar scarcity and high lending rates are worrisome, considering the attendance consequences to the private sector performance. Against the backdrop, this study examined the impact of monetary policy on private sector investment in Nigeria. Secondary data covering the period from 1981 to 2023 were used for the study. The data set were first tested for stationarity properties to avoid spurious regression estimates using Augmented Dickey Fuller (ADF) In addition, the study employed Autoregressive Distributed Lag Model (ARDL) Bound test technique to examine long-run relationship and impact of money supply (M2), lending interest rate (LNDR), real exchange rate (EXR) and inflation (INF) on private sector investment. The study further employed a threshold regression to ascertain optimal lending interest rate threshold consistent with private sector investment in Nigeria. The ARDL Bound testing confirmed that, there is long-run relationship between monetary policy and private domestic investment in Nigeria for the period of study. This was further confirmed by the ARDL long-run coefficients which indicated that; M2 has a significant positive impact on PSINV, as 1% increase in M2 increases PSINV in Nigeria by 77% in the long-run. On the other hand, the study confirmed that, exchange rate and inflation have negative long-run significant impact on private sector investment in Nigeria for the period of the study. A unit increase in EXR and INF decreases PSINV by 39% and 29% respectively. The threshold regression revealed that, the optimal lending interest rate threshold beyond which lending rate is dangerous to investment in Nigeria is 28.11%. In line with the findings, the study recommended for the monetary authority and relevant government agencies to; reduce the price for credit to the private sectors, maintain expansionary monetary policy, halt its continued less impactful devaluation policy and embrace more diversification commitments to acquire more forex and bridge its scarcity as well as improve the provision of basic infrastructure especially power supply to reduce the cost of doing business to halt inflationary tendency in Nigeria.