Nanofluid is the most focused area for the heat transfer application since last two decades. Improvements in the thermal properties are attentive area for the nanofluids. In present study, the efforts have made to coat the higher thermal conductivity material (Ag) on low thermal conductive material (ZnO) to enhance its thermal conductivity. The comparative studies have been reported for water based ZnO and Ag Coated ZnO nanofluids. The nanofluids were prepared by two step methods. The ZnO nanoparticles prepared by chemical reaction of mixed solution of poly-vinyl alcohol (PVA) and Sucrose (1:10 ratio by mass). In addition, the ZnO nanoparticles were coated with Ag by wet chemical method. The synthesized ZnO and mono-dispersed core shell type ZnO: Ag nanoparticles were characterized by field emission scanning electron microscope (FESEM), Transmission electron microscope (TEM), and X- ray Diffraction (XRD) for chemical composition and morphology. In next step, ZnO and Ag coated ZnO nanofluids were prepared by dispersing it into deionized water at varying range of concentration (Ø = 0.02 to 0.1%). The surfactant has been used for stability of nanoparticles in base fluids. The different thermo-physical properties are reported at varying range concentrations. Results shows that, the thermal conductivity of Ag coated ZnO nanofluids have significantly increased than ZnO at low concentration this effect is due to surface enhancement of ZnO nanoparticles by coating of Ag.