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This present research is focus to synthesis water based silver nanofluids by chemical reduction which increase the thermal conductivity to enhance the rate of heat transfer, also to characterize the thermal properties and heat transfer performance of nanofluids over heat exchangers to enhance the efficiency and overall heat transfer coefficient of heat exchanger with simultaneous reduction in the area of heat exchanger. As noted above the basic concept of dispersing solids in fluids to enhance thermal conductivity. Solid particles are added because they conduct heat much better than do liquids. Compared with micro particles, nanoparticles stay suspended much longer and possess a much higher surface area. The surface/volume ratio of nanoparticles is 1000 times larger than that of microparticles. The high surface area of nanoparticles enhances the heat conduction of nanofluids since heat transfer occurs on the surface of the particle. The number of atoms present on the surface of nanoparticles, as opposed to the interior, is very large. Therefore, these unique properties of nanoparticles can be exploited to develop nanofluids.