Nanofluid fuels containing energetic nanoparticles (NPs) are a very promising high-density fuel as the presence of NPs can significantly enhance the fuel's density and energy. Here we reported a comprehensive study on nanofluid fuels through theoretical and experimental methods. Theoretical calculation shows aluminum (Al) is very effective in improving the volumetric specific impulsion and density. Then, a surface-modification method was developed, and oleic acid is the most effective to stabilize Al NPs in fuel. The surface modification inhibits the contact and agglomeration of NPs and makes them stably dispersed in fuel. With the addition of 30% Al NPs, the density and volumetric energy of JP-10 are increased by 20% and 10%, respectively, and the fuel can flow freely. Combustion test shows the combustion efficiency of Al NPs is higher than 95%, with density specific impulsion being increased by 15% through the addition of 16% Al NPs.