Numerical simulations have been carried out to investigate the thermal-hydraulic characteristics using water-based CuO nanofluid with volume fraction (ϕ) = 0 - 5% and fixed nanoparticle size (dp) = 20 nm at Reynolds numbers (Re) = 100 - 389 in a micro-scale backward facing step channel with and without a baffle using finite volume method. The flow is steady, laminar, and incompressible. The channel has an expansion ratio (ER) = 1.9423with a fixed step height (S) of 490 μm. To study the effect of the baffle, different geometrical configurations have been developed by varying its height and location. The height of the baffle is varied as Hb = 160 - 640 μm. The baffle is stationed on the upper wall of the channel at a dimensionless distance (D)= 1, 2, 3 and 4. The upstream, step and upper walls are thermally insulated while the lower wall downstream of the step is under a constant heat flux (qs") = 20000 W/m2. The parameters of interest for analysis are Nusselt number, skin friction coefficient and velocity distribution under different flow conditions. Results indicate that the rise in volume fraction and Reynolds number enhances the Nusselt number, indicating improved heat transfer. However, the skin friction coefficient decreases with the increment in Reynolds number. The increase in baffle height causes the Nusselt number and skin friction coefficient to rise. As the baffle is moved away from the step, the Nusselt number tends to decrease. In comparison to water, the heat transfer improved by about 164% using CuO nanofluid at Re = 389 with ϕ = 5% in the presence of the baffle with Hb = 640 μm and D = 1. However, the heat transfer enhancement has been achieved at the cost of higher pumping power requirements.