The study was carried out to investigate the effect of unemployment on economic development in Uganda. The major objective of the study was to examine the effect of unemployment on economic development in Uganda period from 1994-2021. The specific objectives were to examine the trend of unemployment in Uganda, to examine the level of economic development and to establish the relationship between economic development and unemployment in Uganda. The study used secondary data from international labour organization for the unemployment, Uganda bureau of statistics for the economic development data. The data used is yearly data covering the period from 1994-2021 the data was then analyzed and presented using OLS, Augmented Dickey Fuller to test for the presence of unit root, the Johansen co-integration test was employed to test the existence of the long run relationship between economic development and the independent variable. The study revealed that unemployment negatively affected economic development in Uganda for the period under study. The skewness of 0.09 suggested that the distribution of the unemployment rates was slightly skewed to the right, indicating that there were marginally more observations below the mean than above. Kurtosis was reported at 2.13, which was close to the normal distribution value of 3, suggesting that the distribution of the unemployment rate does not exhibit significant outliers or extreme values. The Jarque-Bera test statistic was 0.90 with an associated probability value of 0.64. Hence, the need by the government and relevant agencies to formulate policies to encourage self-employment and reduce cost of doing business in the country so as to achieve a high, rapid and sustainable economic development.