The aim of this study is to determine the upper limitations of the particle volume fraction for heat transfer performance of TiO2-water nanofluids in microchannels. Nanofluids were prepared by the addition of TiO2 metallic nanoparticles into distilled water chosen as base fluid at five different volumetric ratios (0.25%, 0.5%, 1.0%, 1.5%, and 2.0%). The effects of the Reynolds number (100-750) and particle volume fraction at constant microchannel height (200 mu m) on heat transfer and pressure drop characteristics were analyzed experimentally. Adding metallic oxide particles with nano dimensions into the base fluid did not cause excessive increase of friction coefficient but provided higher heat transfer than that of pure water. It was also observed that water-TiO2 nanofluid increased heat transfer up to 2.0 vol%, but heat transfer decreased after 2.0 vol%. Furthermore, the thermal resistance was calculated and it was seen that adding nanoparticles with an average diameter smaller than 25 nm into the base fluid caused the thermal resistance to decrease.