Computational Fluid Dynamics (CFD) is utilized to study entropy generation for the rarefied steady state laminar 2-D flow of air-Al2O3 nanofluid in a square cavity equipped with two solid fins at the hot wall. Such flows are of great importance in industrial applications, such as the cooling of electronic equipment and nuclear reactors. In this current study, effects of the Knudsen number (Kn), Rayleigh number (Ra) and the nano solid particle’s volume fraction (ϕ) on entropy generation were investigated. The values of the parameters considered in this work were as follows: 0≤ Kn ≤0.1, 103 ≤Ra≤ 106, 0≤ ϕ ≤ 0.2. The length of the fins (LF) was considered to be fixed and equal to 0.5 m, whereas the location of the fins with respect to the lower wall (HF) was set to 0.25 and 0.75 m. Simulations demonstrated that there was an inverse direct effect of Kn on the entropy generation. Moreover, it was found that when Ra was less than 104, the entropy generation, due to the flow, increased as ϕ increases. In addition, the entropy generation due to the flow will decrease at Ra greater than 104 as ϕ increases. Moreover, the entropy generation due to heat will increase as both the ϕ and Ra increase. In addition, a correlation model of the total entropy generation as a function of all of the investigated parameters in this study was proposed. Finally, an optimization technique was adapted to find out the conditions at which the total entropy generation was minimized.