This study examines the asymmetric effects of monetary policy on inflation dynamics in Nigeria using a nonlinear autoregressive distributed lag (NARDL) model. The study employs annual time series data sourced from the Central Bank of Nigeria (CBN) and the World Bank Development Indicators (WDI). Results show that inflation is moderately positively related to the monetary policy rate (MPR) and negatively correlated with the real interest rate (RINR) and exchange rate (EXR), reflecting inflation’s sensitivity to interest rate changes and currency fluctuations. Long-run analysis reveals that both positive and negative shocks to MPR significantly influence inflation, with tightening (positive shocks) having a slightly stronger effect. Exchange rate depreciation and broad money supply growth also negatively impact inflation over the long term, while RINR and liquidity ratio (LQDR) show no significant long-run effects. In the short run, asymmetric responses are evident: monetary tightening reduces inflation, whereas easing increases it. Additionally, RINR, EXR, LQDR, and money supply exhibit significant short-term effects. The error correction term confirms a stable adjustment to long-run equilibrium, correcting approximately 59% of disequilibrium each period. Diagnostic tests indicate no heteroskedasticity or serial correlation, affirming the model’s reliability. The study recommends enhancing monetary policy effectiveness by adopting asymmetric policy frameworks using nonlinear models like NARDL; strengthening exchange rate management and coordinating monetary with fiscal policy to manage short-run inflation impacts; and reassessing traditional tools by enhancing transmission mechanisms such as credit channels and financial market development for better long-term outcomes.