The objective of the present study is to investigate the convective instability driven by buoyancy and the heat transfer characteristics of nanofluids. Using the property relations of nanofluid expressed as a function of the volume fraction of nanoparticles, the ratio of nanofluid Rayleigh number to basefluid one, f is newly defined. The results show that the density and the heat capacity of nanoparticles act as a destabilizing factor. With an increase of ${gamma}$ which is the ratio of thermal conductivity of nanoparticles to that of basefluid, the thermal instability of nanofluid decreases but the heat transfer rate increases.