Hydrodynamic cavitation has been increasingly used as a substitute to conventional acoustic (or ultrasonic) cavitation for process intensification owing to its easy and efficient operation. In this paper, we have put forth conceptual design of a new kind of hydrodynamic cavitation reactor that uses a converging-diverging nozzle for generating pressure variation required for driving radial motion of cavitation bubbles. Moreover, the reactor uses externally introduced bubbles of a suitable gas (argon or air) for cavitation nucleation. This design differs from earlier designs used by researchers where an orifice plate is used for creating cavitating flow. The new design offers a good control over two crucial parameters that affect the cavitation intensity produced, viz. rate of nucleation and nature of pressure variation driving bubble motion. Using numerical simulations of bubble dynamics and associated heat and mass transfer, trends in cavitation intensity produced in the reactor are assessed with varying design parameters. The results of simulation show that the externally introduced bubbles undergo transient motion in the flow through the nozzle generating moderate cavitation intensity. On the basis of results of simulation, some recommendations have been made for the effective design and scale up of the new kind of hydrodynamic cavitation reactors using concept introduced in this paper. (c) 2007 Elsevier Ltd. All rights reserved.