A comprehensive theoretical model which explains the enhancement in thermal conductivity of a nanofluid with respect to variation in the particle size, particle volume fraction and temperature. It was shown that in nanoparticle suspensions, the large enhancement of the heat transfer rate occured due to the large surface area offered by the nanoparticles. The temperature dependence was attributed to the variation of Brownian motion velocity for the particles. The enhancement was found to be linearly proportional to nanoparticle concentration, for small concentrations.