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The study sought to determine the relationship that exists between information literacy and Library Utilisation by Undergraduate Students of Library Science in Federal Universities in South-East, Nigeria. One research question, one objective guided the study and one research hypothesis was formulated and tested at the 0.05 level of significance. The study was conducted using a correlation design. The population of the study consists of 337 year three undergraduate students of Library and Information Science in Federal Universities in 2017/2018 academic session. The sample size of 294 respondents was used for the study. Purposive sampling technique was adopted to select University of Nigeria Nsukka and Michael Okpara University of Agriculture Umudike, respectively for the study. The instrument for data collection was a researcher's designed questionnaire entitled "Information Literacy and Library Utilization by Undergraduate Students of Library Science Questionnaire (ILLUUSLSQ)". The instrument was subjected to face validation by three experts. In order to establish the reliability of the instrument, inter-item correlation method was used. Reliability coefficients obtained for the instrument at 0.71 for the variable making the instrument highly reliable. The questionnaire was administered on the respondents by the researcher with the help of two research assistants. Data collected were analysed using Pearson Product Moment Correlation Coefficient. The r-value was used to answer research questions in order to show the strength of the relationship while p-value was used to test research hypotheses at the 0.05 level of significance. It is here inferred that, a significant relationship exists between Information Literacy and Library utilisation by undergraduate students of library and information science in Federal Universities in south-east, Nigeria. It was recommended that the university authority should provide the necessary facilities to enhance teaching and learning of information literacy.This is aimed at helping students to understand the tools to access information as it will create in users the ability to recognise when information is needed and have the ability to locate, evaluate, and use the needed information effectively.