With the modern era of miniaturization of equipments, heat pipes have attracted major attention in the field of heat transfer. Nanofluids as the working fluid in heat pipes also have attracted a notable attention in recent days due to its superior heat transfer properties. The use of nanofluids in a heat pipe is a very efficient way of enhancing the thermal performance. This project aims to compile the effect of nanofluid on the performance of heat pipes. Effect of different composition of nanoparticles on the performance of heat pipes is studied. The project work covers design and development of a test rig for checking the performance of heat pipe. Pure water and Al2O3-water based nanofluid are used as working fluids. The effect of different composition by percentage of mass on heat transfer will be studied. The results so obtained would compared and optimum value of composition would be found out.