A nanofluid is the suspension of nanoparticles in a base fluid. Nanofluids are promising fluids for heat transfer enhancement due to their anomalously high thermal conductivity. Cooling is essential for maintaining the desired performance and reliability over a very huge variety of products like electronic devices, computer, automobiles, high power laser system etc. Normally water, ethylene glycol and oil are being used as the fluid to carry away the heat in these devices. The development of nanofluid generally shows a better heat transfer characteristic than the water. This paper is an experimental study on the forced convective heat transfer and flow characteristics of a nanofluid consisting of water and different volume concentrations of Al2O3 nanofluid. It is found that heat transfer characteristics improves for 0.2% to 2.0% volume fraction and then decreases.