An Eulerian–Lagrangian modelling approach was employed in order to investigate the flow field, heat transfer and particle distribution in nanofluid flow in a parallel-plate microchannel, with a focus on relatively low Reynolds numbers ($Re\leqslant 100$). Momentum and thermal interactions between fluid and particle phases were accounted for using a transient two-way coupling algorithm implemented within an in-house code that tracked the simultaneous evolution of the carrier and particulate phases while considering timescale differences between the two phases. The inaccuracy of assuming a homogeneous particle distribution in modelling nanofluid flow in microchannels was established. In particular, shear rate and thermophoresis were found to play a key role in the lateral migration of nanoparticles and in the formation of particle depletion and accumulation regions in the vicinity of the channel walls. At low Reynolds numbers, nanoparticle distribution near the walls was observed to gradually flatten in the streamwise direction. On the other hand, for relatively higher Reynolds numbers, higher particle non-uniformities were observed in the vicinity of the channel walls. Furthermore, it was established that convective heat transfer between channel walls and the bulk fluid can either improve or deteriorate with the addition of nanoparticles, depending on whether the flow exceeded a critical Reynolds number of enhancement. It was also established that Brownian motion and thermophoresis had a major role in nanoparticle deposition on the channel walls. In particular, Brownian motion was the main deposition mechanism for nano-sized particles, whereas due to thermophoresis, nanoparticles were repelled away from channel walls. The result of the competition between the two is that deposition gradually increased along the streamwise direction.