Natural convection of gas (Pr = 0.7) between two horizontal coaxial cylinders with uniform internal heat generation is numerically investigated. Such a problem plays an important role in the analysis of lasers in which a similar circuit of a heat-conducting path is used. It has been found that the behavior of the system critically depends on three parameters including the inverse relative gap width sigma(=diameter of the inner cylinder/gap width), the Rayleigh number Ra and the modified Rayleigh number Ra-T which describes heat generation. In the case Ra-T = 0 our results coincide with the known ones. It has been established that in such a system there exist two types of fluid flow for low Rayleigh numbers with different vortex structure. Optimization of the corresponding coaxial laser system has been analyzed. (c) 2005 Elsevier Ltd. All rights reserved.