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With the growing recognition of the potentials of web 2.0 tools, a lot of academic libraries are adopting the technologies and investing heavily in training programs for their staff in order to improve their operations. This study investigated the use of web 2.0 tools and services by the library professionals in Lagos State tertiary institution libraries. Review of the literature was carried out on the availability of use, purpose of use, extent of use, and competency level required for the use of web 2.0 tools in tertiary institution libraries in Lagos State, Nigeria. Challenges and solutions were also proffered. The findings revealed that web 2.0 tools have great potentials for library service provision although they are a relatively new concept. The uses of web 2.0 tools were mostly for communication, research, collaboration, and leisure purposes; however, the extent of the use for service delivery was about average. This indicated that web tools were not sufficiently and efficiently used. Findings also revealed that the respondent librarian in the study area possessed a moderate level required skill needed in web-based technology environment. However, there is need to address certain limiting factors, such as technical hitches like unstable internet access, erratic power supply, and restrictive institutional policies, in order to take full advantage of web 2.0 tools for providing innovative library services and drawing patrons to the library. Based on the findings of the study, it is recommended that library managers in the study area should be provided with uninterrupted electricity power supply to overcome the erratic power situation experienced now, periodic training and re-training programs should be provided to librarians, this in effect will equip librarians with the necessary skill, and policies should be formulated that will guide the conduct and usage of web 2.0 tools for implementation. [ABSTRACT FROM AUTHOR]