This chapter surveys heat transfer in nanofluids. It summarizes and analyzes the theories regarding heat transfer mechanisms in nanofluids, and it discusses the effects of clustering on thermal conductivity. The heat transfer associated with conduction is presented through various experiments followed by a discussion of the theories developed. Relationships between thermal conductivity and various factors such as temperature, concentration, and particle size are also displayed along with a discussion on clustering. There is a brief discussion on convection where the number of studies is limited. There is research currently being performed on the manipulation of the properties governing the thermal conductivity of nanofluids—the particle size, shape, and surface area. Other 50factors that affect heat transfer are the material of the nanoparticle, particle volume concentration, and the fluid used. Although the interest in this relatively new class of fluids has generated many experimental studies, there is still disagreement over several aspects of heat transfer in nanofluids, primarily concerning the mechanisms behind the increased thermal conductivity. Although nanoparticles have greatly decreased the risks, there is still evidence of unwanted agglomeration, which causes erosion and affect the overall conductivity. Research is currently being conducted to determine how to minimize this unwanted clustering.