Experimental works were conducted to investigate the effect of Al2O3 sizes and volumeconcentration on the rate of nanofluids heat transfer in a compact heat exchanger. Two sizes ofAl2O3 nanoparticle, 40 nm and 100 nm, were mixed with demineralized water at 2% and 10%volume concentrations. Sodium Lauryl Sulphate (SLS) powder was added to enhance the mixingprocess and stabilize the dispersion of the nanofluids. A custom-made closed loop test rig weredesigned, fabricated and tested for these experiments. The test rig was set-up to represent the actualapplication of the nanofluids in cooling of a compact heat exchanger. Experimental runs wereconducted which include the runs for water, 40 nm Al2O3-water and 100 nm Al2O3-water. Theresults indicate that Al2O3-water gave better heat transfer performance than water alone. Nanofluidswith 40 nm- Al2O3 gives better heat transfer performance as compared to 100 nm- Al2O3 nanofluids.The results of the current work generally indicate that nanofluids have the potential to enhance theheat transfer of a compact heat exchanger if properly designed. This superior performance of thenanofluids would only be produced if smaller diameter of nanoparticles were used (less than 100nm). No enhancement in heat transfer can be observed by using nanofluids with particle size of 100nm or at higher volume loading (more than 5%).