Present study tries to put light on hydrodynamics of nanofluids in microchannels. For the present hydrodynamic study, the microchannels of hydraulic diameters of 212 and 301 μn are used. Present study also uses nanofluids in microchannel. To observe the hydrodynamic effect of nanofluids in microchannel, the alumina nanoparticles with sizes 45 nm are chosen with the water as base fluid. The nanofluids with the dilute concentrations 0.25 vol% are used to observe the effect of volume fraction. From the study of base fluid flow in microchannel, it is found that the axial pressure drop is linear thus showing the incompressible behaviour of fluid. For all microchannels, early transition to turbulence was observed. Also for the same Re the pressure drop was higher for smaller channel. However, the usage of nanofluids in these microchannels shows different behavior from normal fluids. The axial pressure drop was again linear thus proving that even though these fluids are different from normal fluids; they follow the behaviour of incompressible Newtonian fluids. Surprisingly, the friction factor was similar for these fluids as compared to base fluids. This can be attributed to dilute concentration of nanofluids, which make them a homogeneous fluid. It suggests that the use of dilute nanofluids in microchannel results in no or little penalty in pressure drop. It also suggests that if nanofluids have to be used as a better coolant, the hydrodynamics and heat transfer characteristics has to be studied as higher concentrations. © 2009 by ASME.