This review paper aims at the genetic potential of Nigerian local chickens (NLC) and highlighted the breed types, characteristics, and distribution which includes Fulani ecotypes and Forest savannah (Yoruba) ecotypes. The paper also explained the management and production systems of NLC which comprise extensive and semi-intensive systems. Furthermore, the genetic diversity and potentials were not left out and it shows that there is a presence of genetic diversity within and among breeds of local chicken that are responsible for their differences in phenotypic appearance. Approaches towards the improvement of genetic potentials were elaborated such as the development of improved indigenous lines, crossbreeding, within-breeds selection, and introgression and cockerel exchange. These approaches showed a significant result on genetic improvement. Additionally, the importance of indigenous breeds of chicken was emphasized as a source of animal protein, income revenue, religious activities, and job creation. However, the challenges towards the genetic improvement of NLC were also incorporated, for example, low productivity, late sexual maturity, disease occurrence, and lack of research. Moreover, the local chickens are of great importance because their contribution to the national economy is enormous with huge future prospects.