Based on the first-law and second-law of thermodynamics, we investigate thermal performance and entropy generation of water-alumina nanofluid flows in porous media embedded in a microchannel under local thermal non-equilibrium condition. Analytical closed-form solutions of two-dimensional temperature distributions are obtained for the cases with and without the viscous dissipation term in the energy equation. The thermal non-equilibrium entropy generation function is derived using the differential method. Due to the embedment of the porous medium in the microchannel and the suspension of the nanoparticle in the working fluid, the viscous dissipation effect is magnified significantly, altering thermal characteristics and entropy generation of the system. For the case where the viscous dissipation effect is neglected, total entropy generation and fluid friction irreversibility are overrated while heat transfer irreversibility is remarkably underestimated. In a low-aspect-ratio microchannel, the suspension of nanoparticles in the fluid decreases the thermodynamic efficiency from the second-law point of view. Utilization of nanofluids in a high-aspect-ratio microchannel enhances exergetic effectiveness in low-Reynolds-number flow regime. By reducing the nanoparticle size, entropy generation can be decreased by as much as 73%. The optimum Reynolds number associated with minimum entropy generation for nanofluid flow in a porous microchannel is identified. The optimum range of porous medium permeability is characterized by Da >= 10(-1). It is observed that effectiveness of the interstitial heat transfer between the solid and fluid phases of the porous medium induces a pronounced effect on the entropy generation, signifying the importance to consider the thermal non-equilibrium condition in the second-law performance analysis of porous-medium flow. (C) 2014 Elsevier Ltd. All rights reserved.