Natural convection and heat transfer inside a porous concentric horizontal cylindrical annulus saturated by a Cu–water nanofluid was investigated in this study. The governing equations were discretized using the finite difference technique and solved using the alternating direction implicit (ADI) method. It was found that the increase in nanoparticles had a favorable effect on the enhancement of the heat transfer for low Rayleigh numbers. However, exceeding a given threshold of Rayleigh number, the addition of nanoparticles had an adverse effect on the heat transfer. Also, the study revealed the effect of porosity on Nusselt number, where the increase in volume fraction of nanoparticles in the porous medium leads to a considerable increase in the Nusselt number ratio when the porosity equals 0.5 and 0.8, an opposite behavior was observed when this latter equals 0.1. The bifurcation between the unicellular and the bicellular regimes was investigated for several nanoparticles volume fractions and a wide range of porosity. The results revealed that regardless of the porosity, the critical Rayleigh number for the transition from the unicellular to the bicellular regime increases with volume fraction of nanoparticles for the whole range of the radius ratio. Several numerical correlations were developed for the critical Rayleigh number in terms of volume fraction of nanoparticles and porosity of the medium.