This paper describes a new method to enhance the heat transfer capability of a single phase liquid by adding phase change nanoparticies (nano-PCMs), which absorb thermal energy during solid-liquid phase changes. Two types of slurries having bare and silica encapsulated indium nano-PCMs have been made using colloid method and suspended into poly-alpha-olefin (PAO) for potential high temperature (150 similar to 180 degrees C) applications. The silica shells were devised in an effort to prevent agglomeration of molten phase change materials. In addition, the silica shells were evaluated for their effect on thermal performance. Experiments with the microchannel heat exchanger (MC) indicated that the heat transfer coefficient of slurry with 30% bare indium nanoparticle can reach 47,000 W/m(2) K at flow rate of 3.5 ml/s (velocity of 0.28 m/s). The magnitude of heat transfer coefficient represents 2 times improvement over that of single phase PAO, and is also higher than that of single phase water which is at similar to 45,000 W/m(2) K. A thermal cycling test involving 5000 cycles showed a consistent performance of both types of slurries, thus negating the need for the encapsulation of In nano-PCMs in PAO. (C) 2012 Elsevier Ltd. All rights reserved.