The study examined the economic effects of farmer-grazier conflicts in the fadama areas of Bauchi State in Nigeria. Bauchi State occupies total land area of 492,359 km2 and has human population of 4,696,465. Using multistage random sampling technique a total of 60 fadama farmers were randomly selected from 60 Fadama Users Associations (FUA) and a corresponding 60 pastoralists randomly selected from 60 fadama communities where the selected FUAs resided. Primary data were collected using structured questionnaire administered through individual personal interviews. The data were analysed using the descriptive statistics, t-test and alternative cost technique. Results revealed that about N3, 193, 100.00 was incurred from both totally damaged and partially destroyed tube well/washbore equipment with water pumps recording N176, 415.00. Motorcycles and bicycles accounted for N565, 254.00 in terms of losses experienced. Comparatively, the arable farmers incurred higher (N80, 075,172.00) losses in monetary term than the pastoralists (N7, 047, 013.00). While reduction in farm production, increased poverty within and among the communities and social insecurity and inadequate food supply for the family were the major setbacks encountered in the area, interruption of education of children and reduction in healthcare provision of the family represented relatively lower proportions. Further, the income (N358, 000.00) of farmers in the conflict area was significantly (p<0.05) lower than those in non-conflict areas (N437, 313.00). Conclusively, the farmer-grazier conflicts have had negative economic effects on both the families involved and the nation in terms of the huge resources lost. It is therefore, strongly recommended that the government should put appropriate measures towards curbing the occurrence of such conflicts for the benefit of all.