Heat transfer enhancement of a mixed convection laminar Al2O3-water nanofluid flow in an annulus with constant heat flux boundary condition has been studied employing two phase mixture model and effective expressions of nanofluid properties. The fluid flow properties are assumed constant except for the density in the body force, which varies linearly with the temperature (Boussinesq's hypothesis), thus the fluid flow characteristics are affected by the buoyancy force. The Brownian motions of nanoparticles have been considered to determine the effective thermal conductivity and the effective dynamic viscosity of Al2O3-water nanofluid, which depend on temperature. Three-dimensional Navier-Stokes, energy and volume fraction equations have been discretized using the finite volume method while the SIMPELC algorithm has been introduced to couple the velocity-pressure. Numerical simulations have been presented for the nanoparticles volume fraction (phi) between 0 and 0.05 and different values of the Grashof and Reynolds numbers. The calculated results show that at a given Re and Gr, increasing nanoparticles volume fraction increases the Nusselt number at the inner and outer walls while it does not have any significant effect on the friction factor. Both the Nusselt number and the friction coefficient at the inner wall are more than their corresponding values at the outer wall. (C) 2011 Elsevier Ltd. All rights reserved.