Abstract: We investigate the interrelationships among bank competition, risk taking and efficiency during banking sector reforms in Nigeria (1993–2008). Our modelling procedure involves three stages: we measure bank productive efficiency, using data envelopment analysis, and the evolution of bank competition, using conjectural variations (CV) methods; then, we use the CV estimates to test whether regulatory reforms influence bank competition; finally we investigate the impact of the reforms on bank behaviour. The evidence suggests that deregulation and prudential re-regulation influence bank risk taking and bank productive efficiency directly (direct impact) and via competition (indirect impact). Further, it is found that as competition increases, excessive risk taking decreases and efficiency increases. Overall, the evidence on Nigeria affirms policies that foster bank competition.