Since the twentieth century, Southeast Nigeria has experienced a remarkable and unprecedented level of urbanization driven by government policies and programs. As urban development expanded in the region, rural underdevelopment intensified. Consequently, the study of urbanization and its impact on rural areas has recently attracted significant scholarly attention. The findings of these studies are mixed; while some argue that urbanization positively affects rural areas, others contend the opposite. Regardless of these arguments, the role of urbanization in the underdevelopment of rural areas, particularly in Southeast Nigeria, has not received thorough examination. This paper, therefore, examines the role of the government, from colonial times to the present, in the underdevelopment of rural areas in Nigeria, with a specific focus on Southeast Nigeria. It also analyzes the role of urbanization in rural underdevelopment during the period under review. Primary and secondary sources were utilized in this study, while thematic, historical descriptive and analytical approaches were employed in data analysis. The study found a negative relationship between urban and rural areas in the region and concluded that government policies, through urban bias, contributed to rural underdevelopment in Southeast Nigeria during the study period.