The enhancements of heat transfer coefficient and Nusselt number in a heat exchanger system were achieved by using Titanium-dioxide (TiO2) nanoparticles with an average diameter of 10 nm. TiO2 nanoparticles/water has a better thermal conductivity compared to conventional working fluids (water). The heat transfer rate in a vertical shell and tube heat exchanger counter flow under laminar and turbulent flow conditions were investigated. The liquid flow rate has been varied in the range of 50-300 l/h whilethe inlet temperature was between 20 to 60ºC. The effects of factors such as the Reynolds number and the peclet number on the heat transfer and flow characteristics were carried out and investigated. It was observed that the convection heat transfer increased remarkably with the increment of the temperature under various values of the Reynolds number.As well as,the Nusselt number increased about 17% as compared to pure water;at a nanofluid velocity of 0.0192 m/s at inlet temperature of 600C.