Every local government in Nigeria desires quality service delivery as it is pertinent to the sustainability of grassroots development. The fundamental factor in achieving quality services, are adequate and reliable of the revenue sources as well as quality human resources that will serve as instrument for formulation and implementation of local government financial resources. This study assessed revenue generation and service delivery in Nigeria, a study of Abuja Municipal and Abaji Area Councils of Federal Capital Territory from 2008 -2013; arising as a result of low service delivery in Abaji specifically in health care and environmental sanitation services. The objective of the study is to make comparative assessment of actual revenue generated by the two area councils and how the revenue sources have affected service delivery. For methodology of the study, questionnaires were administered to sample beneficiaries; oral interviews for selected Heads of Department (Account, Health and Sanitation) and non-participative observation were used to collect primary data. The secondary data were collected through published academic journals, council‟s document (quantitative data), published and unpublished masters thesis. However, the study found that Abuja Municipal and Abaji area councils have disparity in revenue sources, qualitative and quantitative service delivery as a result of level and access to fund generation in Abuja Municipal. Consequently, the study recommended among others that; in achieving level of funding for quality service delivery in Abaji area council as expected by the beneficiaries, the Federal Capital Territory Administration (FCTA) should increase the statutory allocation of Abaji area council, to enable the council improve on its socio-economic service delivery for encouraging taxpayer and attract other investors for commercial purposes. This will also serve as an avenue of boosting the IGR and increase quality and quantity service delivery in Abaji area council of Federal capital Territory.