The performance of IC engine can be enhanced by exhaust gas heat recovery using solid state phase change materials, such as pentaerythritol (C5H12O4). Further enhancement was achieved by adding Al2O3 nanoparticle to improve heat transfer performance of C5H12O4, that has rather poor thermal conductivity. In this study the effect of adding Al2O3 nanoparticle on heat transfer performance of pentaerythritol (PE) was studied using a heat recovery heat exchanger integrated with the exhaust pipe of an internal combustion engine. The experimental results showed when 0.1% and 0.5% Al2O3 were added to PE, instead ofusing purePE, the charging efficiency increased by 5.48% and 14.77% and energy savings by 11.46% and 18.3%, respectively. The characterization methods such as TGA-DTA, DSC, FTIR and LFA were used. Thermal degradation kinetics of pentaerythritol added with Al2O3 nanoparticles was studied by Coats-Redfern method. The dispersion stability, thermal/chemical degradation and thermal energy storage performance of PE with Al2O3 nanoparticles are reported in this paper.