A deep understanding of fluidic maldistribution in microscale multichannel devices is necessary to achieve optimized flow and heat transfer characteristics. A detailed computational study has been performed using an Eulerian–Lagrangian twin-phase model to determine the concentration and thermohydraulic maldistributions of nanofluids in parallel microchannel systems. The study reveals that nanofluids cannot be treated as homogeneous single-phase fluids in such complex flow situations, and effective property models drastically fail to predict the performance parameters. To comprehend the distribution of the particulate phase, a novel concentration maldistribution factor has been proposed. It has been observed that the distribution of particles does not entirely follow the fluid flow pattern, leading to thermal performance that deviates from those predicted by homogeneous models. Particle maldistribution has been conclusively shown to be due to various migration and diffusive phenomena such as Stokesian drag, Brownian motion and thermophoretic drift. The implications of particle distribution on the cooling performance have been illustrated, and smart fluid effects (reduced magnitude of maximum temperature in critical zones) have been observed for nanofluids. A comprehensive mathematical model to predict the enhanced cooling performance in such flow geometries has been proposed. The article clearly highlights the effectiveness of discrete phase approach in modeling nanofluid thermohydraulics and sheds insight on the specialized behavior of nanofluids in complex flow domains. © 2016, Springer-Verlag Berlin Heidelberg.