The behaviour of nanofluids is investigated numerically inside a two-sided lid-driven differentially heated square cavity to gain insight into convective recirculation and flow processes induced by a nanofluid. A model is developed to analyze the behaviour of nanofluids taking into account the solid volume fraction Z. The transport equations are solved numerically with finite volume approach using SIMPLE algorithm. Comparisons with previously published work on the basis of special cases are performed and found to be in excellent agreement. The left and the right moving walls are maintained at different constant temperatures while the upper and the bottom walls are thermally insulated. Three case were considered depending on the direction of the moving walls. Governing parameters were 0.01 < Ri < 100 but due to space constraints only the results for 0. 1 < Ri < 10 are presented. It is found that both the Richardson number and the direction of the moving walls affect the fluid flow and heat transfer in the cavity. Copper-Water nanofluid is used with Pr = 6.2 and solid volume fraction Z is varied as 0.0%, 8%, 16% and 20%. Detailed results are presented for flow pattern and heat transfer curves. (c) 2006 Elsevier Ltd. All rights reserved.