This research work was set out to find and analyze the relationship between Foreign Direct Investment (FDI) and growth in Ugandas energy sector as a vital part of economic development considering the ever present correlation between activities in various industries within an economy.To study the relationship between FDI and energy development, time series data for the years 1970-2011 was retrieved from secondary sources namely United Nations Statistics Division, International Monetary Fund (IMF) and Word Bank.Gross Domestic Product (GDP) was the measure for economic growth used.Reference was made to other variables such as changes in Standard of Living, Inflation,Exchange rates and others in an attempt to further explain the effect of FDI.The first definition of GDP in this paper is the total income of all sectors or industries in the economy.(Mankiw, 2009)Industries in Uganda are categorized into;1.Agriculture, hunting, fishing and forestry2.Mining, extraction and utilities3.Manufacturing4.Construction5.Wholesale, retail trade, restaurants and hotels6.Transport, storage and communication7.Other activitiesThe energy sector lies under mining, extraction and utilities.Water, production of electricity by hydro generated power, solar and bio fuels as well as extraction of natural resources through mining and drilling are all within this section.Growth or decline in the energy industry was estimated from the percentage of mining extraction and utilities contribution to GDP.Stock in the energy industry includes pipelines for crude oil transportation,refineries and dams for generation of hydroelectric power among others.Increase in stock led to increase in energy output (production and consumption) which were duly represented in the GDP equation.Where GDP is equal to the sum of Consumption spending, Investment spending, Government expenditure and Net exports (exports less imports).GDP=C+I+G+(X-M)Foreign Direct Investment is 10％ or more interest in foreign assets; that is assets in a foreign country or equity stake of in a foreign-based enterprise.It is a portion of private investment in Uganda computed in Investment spending.Growth in FDI shows in investment spending percentage contribution to GDP.Mining, extraction and utilities contribution to GDP and FDI contribution to GDP data was imputed in E-views software.The result was used in Ordinary Least Squares (OLS) regression method.An econometric model corrected for random error was used to test the null hypothesis.It was established that there is a positive relationship between the two variables and the null hypothesis was rejected.Also noted was the tendency for energy development to encourage more FDI, both variables supplementing each other and showing a continued upward trend.The role of other factors contributing to energy development such as natural resource, government expenditure and increasing local and global demand for energy was not overlooked.FDI could not be regarded as the cause of energy development in Uganda.In fact several factors work as a combined force in the effort to meet the countys energy needs whilst considering regional and international influences.