Novel high-temperature heat transfer fluids (HTFs) with incorporated phase change nanomaterials were synthesized and tested for heat transfer and thermal energy storage. The advanced thermal properties were achieved by preparing a nanofluid consisting of core/shell silica encapsulated tin (Sn/SiO2) nanoparticles dispersed in a synthetic HTF Therminol 66 (TH66) at loadings up to 5 vol%. Tin nanoparticles were synthesized by modified polyole reduction method followed by sol-gel silica encapsulation process. The measured increase in thermal conductivity of the nanofluid (13% at 5 vol%) was in agreement with Maxwell's effective medium theory. Latent heat of phase change during melting of Sn core added 11% increase to the volumetric thermal energy storage of the nanofluid when cycled in between 100 degrees C and 270 degrees C. The value could be further improved if thermal cycling is conducted in a narrower temperature range. The experimental results demonstrated dual functionality of the engineered nanofluids as desired for Concentrated Solar Power systems. Viscosity and stability of the nanofluids as well as thermal stability of core/shell nanomaterials) were investigated in a wide temperature range to obtain a perspective on any additional pumping power requirements for the nanofluid over the base fluid. Copyright (c) 2013 John Wiley & Sons, Ltd.