In this paper, the entropy generation due to flow and heat transfer of nanofluids between Co-rotating cylinders with constant heat flux on the walls is studied, analytically. The governing equations in cylindrical coordinates are simplified and solved to find the effect of using nanofluids with different volume fractions on the entropy generation rate in the annulus. The results are presented at various values of Brinkman number (Br), velocity ratio (lambda), radius ratio (Pi), heat flux on the inner cylinder (Q(0)), and a parameter (Psi) which determines the contribution of the fluid friction in the overall entropy generation. The analysis has been done mainly using Al2O3-EG nanofluid, though some comparisons with TiO2-Water nanofluid are made. The thermophysical properties of nanofluids are calculated using the available relations based on experimental data. From the average entropy generation viewpoint, at different conditions, an optimum volume fraction of nanoparticles is obtained in which the average entropy generation is minimized. Finally, some comparisons between the effects of using Al2O3-EG, and TiO2-Water nanofluids are made. The results show that TiO2-Water nanofluid is more suitable than Al2O3-EG nanofluid to use as the working fluid at low Brinkman numbers. (C) 2012 Elsevier Ltd. All rights reserved.