We have found that the Brownian motion of nanoparticles at the molecular and nanoscale level is a key mechanism governing the thermal behavior of nanoparticle–fluid suspensions (“nanofluids”). We have devised a theoretical model that accounts for the fundamental role of dynamic nanoparticles in nanofluids. The model not only captures the concentration and temperature-dependent conductivity, but also predicts strongly size-dependent conductivity. Furthermore, we have discovered a fundamental difference between solid/solid composites and solid/liquid suspensions in size-dependent conductivity. This understanding could lead to design of nanoengineered next-generation coolants with industrial and biomedical applications in high-heat-flux cooling.