This research aims to analyze the process parameters of an innovative method for preparing TiO2 nanofluids. In the arc spray nanofluid synthesis system (ASNSS), a titanium rod, deployed as an electrode in electrical discharge machining (EDM), is melted by the submerged arc and vaporized in deionized liquid under a controlled vacuum environment. The vaporized Ti particles are then rapidly quenched by the designed cooling system, thus forming nanocrystalline powders. The experimental results and analysis revealed that the critical electric current for preparing the nanofluid is 1.63 A. Parameters such as applied electric power (including current, voltage and pulse-duration) and temperature of deionized liquid are found to influence the characteristics of the generated nanoparticles. With a set of designed process parameters, the developed ASNSS can generate the TiO2, nanofluid with an average particle diameter less than 20 nm and with an improved size distribution and high roundness. (C) 2007 Elsevier B.V. All rights reserved.