The paper is concerned about formulation of aqueous based nanofluids and its application under natural convective heat transfer conditions. Titanium dioxide nanoparticles are dispersed in distilled water through electrostatic stabilization mechanisms and with the aid of a high shear mixing homogenizer. Nanofluids formulated in such a way are found very stable and are used to investigate their heat transfer behaviour under the natural convection conditions. The preliminary results are presented in this paper. Both transient and steady heat transfer coefficients are measured and the results show a systematic decrease in the natural convective heat transfer coefficient with increasing particle concentration. This is in contradiction to the initial expectation. Possible reasons for the observations are discussed.