Do level of food demanded and dietary diversity jointly provide better estimates on household food security status or is this association modified by level of urbanization within urban setting? To better understand this relationship, we investigated the Nigerian urban household’s food security situation in terms of food access and utilization component through a demand system and diet diversity models using cross-sectional data. Results showed that the food groups considered were normal goods but with varying magnitudes. Most households were price-sensitive, especially to high-value food commodities, while cross-price effect showed a mix of substitute and complementary relationships. However, the level of dietary diversity was moderate. The quantile regression analysis revealed that income and urbanicity index significantly improved consumption of diverse diets, with higher impacts at the lowest quantile. The linkages between rising urbanization and the scourge of food insecurity will require more integration of strategies aimed at tackling the urban food system, infrastructural development and food policy consideration. Therefore, policy options tailored towards better food access and consumption of diverse diet were proffered.