The study investigates the socio-economic importance of the Calabar Carnival on the economic development of Cross River State, Nigeria. To establish the relationship between the festival and the development of Cross Rivers State, hypotheses were formulated based on the identified major independent variables namely: employment creation, income generation, and infrastructural development while the dependent variable is the Calabar Carnival Festival. Literatures related to the major variables of the study were reviewed. To generate data for hypotheses testing, questionnaire was used; survey research design was adopted for study while utilizing the convenience sampling technique to select the respondents (300) for study. The generated data were statistically tested at a 0.05 level of significance using Pearson Product Moment Correlation Coefficient analysis. The analysis showed that the Calabar carnival has significant relationship with job creation, income generation, and infrastructural development in Cross River State. Based on the result of the findings, the study recommended the need for tourism industry be fortified with security and as well be privatized. Also, the study recommends that youth development should be a cardinal point in the carnival as a promotional strategy in other to accelerate the state's socio-economic development.