The objective of this paper is to study the effect of nanoparticles on Coefficient of Performance (COP) and thermal load of main components (generator, condenser, evaporator and absorber) of absorption refrigeration system using H2O–LiBr. Al2O3 nanoparticles have been added into the H2O–LiBr solution to make the binary nanofluid, and Polyvinyl Alcohol (PVA) has been used as a stabilizer. Experimentation part involves the preparation of nanofluid and tests on H2O–LiBr and H2O–LiBr with 0.05% Al2O3. The effect of nanoparticles on COP and thermal load of components has been studied by varying the operating temperatures (generator, condenser and absorber temperature) and volume fraction of nanoparticles. The results show that COP and thermal loads of system with nanoparticles at different operating temperatures are following the same trend as base fluid system. The COP of system with nanoparticles at each operating temperature is higher than base fluid system. The heat supplied to generator with nanoparticles is less than without nanoparticles while heat rejected in condenser and absorber with nanoparticles is higher than without nanoparticles at each operating temperature. The heat exchanged in evaporator with nanoparticles is also higher than that without nanoparticles at each operating temperature. We also obtained maximum COP with 0.2% volume fraction of nanoparticles.