This study investigated the influence of Foreign Direct Investment (FDI) on the financial performance of commercial banks in Nigeria. The key indicator used here is Profit Margin (PM), utilizing secondary data from 1991 to 2022, obtained from the Central Bank of Nigeria, National Bureau of Statistics, World Bank, St. Louis Bank as well as Nigeria Deposit Insurance Corporation (NDIC) database, and financial reports of commercial banks, the study employed a variety of statistical techniques to analyze the data. These techniques include the Augmented Dickey-Fuller (ADF) unit root test for stationarity, cointegration test for long-run relationships, and the Vector Autoregressive (VAR) model for dynamic interactions. Additionally, post-estimation diagnostics such as the Breusch-Godfrey Serial Correlation LM Test, Jaque-Bera test, and CUSUM test for model stability were conducted. The findings reveal that FDI significantly influences the financial performance (Profit Margin) of commercial banks in Nigeria. Specifically, FDI shows a positive influence on profit margins in the short term, while long-term effects vary due to factors like increased competition and changing economic conditions. The study also highlights the importance of considering macroeconomic variables such as GDP, inflation, and trade openness in the analysis.