Ahmed Musa scored both goals as Nigeria swept aside World Cup debutants Iceland to leave Group D intriguingly poised with one round of games to go, BBC Sports reported.
The Super Eagles would have gone out with defeat but came good in Volgograd.
Musa showed superb technique to fire Nigeria ahead on the half-volley before the Leicester player rounded keeper Hannes Thor Halldorsson to make it 2-0.
Iceland missed a late penalty awarded after a video assistant referee review, Gylfi Sigurdsson firing over.
The result gives a slight lift to beleaguered group rivals Argentina. Victory over Nigeria in their final game would see La Albiceleste safely into the last 16 - as long as Iceland do not beat group leaders Croatia. In that event, goal difference would decide who progressed.
Victory in that game for Nigeria, on the other hand, would now guarantee their progress. Having started the day bottom of the group, they find themselves second - three points behind Croatia, who have already qualified for the knockout stage.
Iceland, who face Croatia on Tuesday, and Argentina, who play Nigeria at the same time, both have one point.