The goal of this study was to examine the effect of interactive radio instruction (IRI) in improving the literacy skills of out-of-school children in IDP camps in Nigeria. The study was a quasi-experiment involving 470 children who were out of school at the time of the study. The indices for measuring literacy skills included phonological skills, letter knowledge, oral comprehension and vocabulary skills. The result of the intervention showed that although all the children scored low regarding their literacy skills at pre-intervention, participants in the IRI group reported a significant improvement in their literacy skills after the intervention. A follow-up assessment was carried out after twelve months and the result showed stability in the literacy skills of participants in the IRI group while those in the control group did not improve in their literacy skills over time. Comparatively, IRI was found to be more efficient in improving literacy skills than a face-to-face learning environment. The implications of these results on learning have been highlighted.