Capital and credit risk management are the livewire of the banking industry. A shortfall in capital can be detrimental to a bank. Hence, the Central Bank, from time to time, requires banks to recapitalize and expand in size to boost depositors’ confidence and stimulate performance. The study assesses the role of Capital Adequacy and key Macroeconomic Variables on Deposit Money Banks Performance in Nigeria. The Panel ARDL method was deployed to analyse the relationship between capital adequacy, bank performance, and selected macroeconomic variables. The study utilized data from the Annual Reports of banks in Nigeria spanning from 2008 to 2022. Various diagnostic tests, including stationarity tests and co-integration tests, were conducted to ensure the appropriateness of the Panel ARDL technique. The study revealed that asset quality significantly influence bank performance in Nigeria. Larger banks with adequate capital adequacy ratio tend to exhibit higher profitability. Capital adequacy ratio was found not to have any significant impact on bank profitability both in the short run and long run model considering the p-value of 0.6331 and 0.1842 percent respectively. GDP growth rate and inflation rate both were found to impact bank performance in the long run but not in the short run as the p-value of inflation rate of 0.32 is in excesses of 0.05 percent. Capital adequacy ratio and Bank size were shown to significantly impact economic growth (GDP) in both the long run and short run model at the 5% and 10% level of significance however, the inflation model showed that Capital adequacy ratio had no significant impact in the long run as the p-value of 0.18% is in excesses of 0.05 and 0.01% respectively. It is recommended that prudent capital adequacy measures be put in place to stimulate growth. Banks should be encouraged to expand their branches and activities, as increased bank sizes promote high returns on assets