Experiments were performed to explore the micro-channel cooling benefits of water-based nanofluids containing small concentrations of Al2O3. The high thermal conductivity of nanoparticles is shown to enhance the single-phase heat transfer coefficient, especially for laminar flow. Higher heat transfer coefficients were achieved mostly in the entrance region of micro-channels. However, the enhancement was weaker in the fully developed region, proving that nanoparticles have an appreciable effect on thermal boundary layer development. Higher concentrations also produced greater sensitivity to heat flux. Despite this enhancement, the overall cooling effectiveness of nanoparticles was quite miniscule because of the large axial temperature rise associated with the decreased specific heat for the nanofluid compared to the base fluid. For two-phase cooling, nanoparticles caused catastrophic failure by depositing into large clusters near the channel exit due to localized evaporation once boiling commenced. These and other practical disadvantages bring into question the overall merit of using nanofluids in micro-channel heat sinks. (c) 2006 Elsevier Ltd. All rights reserved.