Investigators have been surprised with new thermal phenomena behind the recently discovered nanofluids, fluid with unprecedented stability of suspended nanoparticles although huge differences in the density of nanoparticles and fluid. For example, nanofluids have anomalously high thermal conductivities at very low volume fraction, strongly temperature-dependent and size-dependent conductivity, and three-fold higher critical heat flux than that of base fluids. In this paper, the thermal characteristics of free convection in a rectangular cavity with nanofluids such as water-based nanofluids containing 6nm copper and 2nm diamond are theoretically investigated with a new model of the thermal conductivity for nanofluids presented by Jang and Choi. In addition, based on theoretical results, the effects of various parameters such as the volume fraction, the temperature, and the size of nanoparticles on free convective instability and heat transfer characteristics in a rectangular cavity with nanofluids are suggested.

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