The separation and the reattachment of nanofluid flow through a sudden expansion in an annular passage have been studied. ANSYS FLUENT was deployed to simulate the effect of separation of nanofluid flow on the local and average convection heat transfer in an annular passage. The outer tube was made of aluminium with internal diameter of 83 mm and horizontal length of 600 mm, subjected to a constant wall heat flux. The investigation was performed with varying Reynolds number ranging from 5000 to 25000, heat flux from 719 W/m2 to 2098 W/m2, and the enhancement of step heights expanding from 0 mm (d/D=1) to 18.5 mm (d/D=1.8). The increase of flow velocity results in the sudden drop of the surface temperature in proximity to the pipe entrance, followed by gradual increment of surface temperature along the pipe. The minimum surface temperature could be obtained at flow reattachment point. The position of the minimum temperature point is independent on the inlet flow velocity. In general, the average Nusselt number increases with the increase of Reynolds number.