Classical 1/4 BPS configurations consist of 1/2 BPS dyons which are positio
ned by competing static forces from electromagnetic and Higgs sectors. Thes
e forces do not follow the simple inverse square law, but can be encoded in
some low energy effective potential between fundamental monopoles of disti
nct types. In this paper, we find this potential by comparing the exact 1/4
BPS bound from a Yang-Mills field theory with its counterpart derived from
the low energy effective dynamics of monopoles. Our method is generalized
to arbitrary gauge groups and to arbitrary BPS monopole-dyon configurations
. The resulting effective action for 1/4 BPS states is written explicitly,
and shown to be determined entirely by the geometry of multimonopole moduli
spaces. We also explore its natural supersymmetric extension.