IInvestigators have been perplexed with the thermal phenomena behind the recently discovered nanofluids, fluids with unprecedented stability of suspended nanoparticles although huge difference in the density of nanoparticles and fluid. For example, nanofluids have anomalously high thermal conductivities at very low fraction, strongly temperature-dependent and size-dependent conductivities, and three-fold higher critical heat flux than that of base fluids. Traditional conductivity theories such as the Maxwell or other macroscale approaches cannot explain why nanofluids have these intriguing features. So in this presentation, we introduce 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 physically explain the new phenomena for nanofluids. In addition, based on the model, the effects of various parameters such as the ratio of thermal conductivity of nanofluids to that of a base fluid, volume fraction, nanoparticle size, and temperature on the thermal conductivities of nanofluids are investigated.