Ground source heat pump (GSHP) systems are well established as an energy‐efficient space conditioning device. However, for better utilization of the ground source, improvement in GSHP performance is desirable, which limits the small temperature difference between the ground and the circulating fluid. In this study, efforts have been made to investigate the performance of a ground heat exchanger (GHX) with a nanofluid as a heat carrier. Mathematical modeling is performed for the closed‐loop vertical U‐tube GHX with six different (Al2O3, CuO, graphite, multiwalled carbon nanotube, graphene, and Cu) water‐based nanofluids. The effect of different operating parameters on GHX length, fluid temperature, and pressure drop with nanofluids is determined. On the basis of the analytical results, it is found that the graphite particle‐based nanofluid plays a prominent role to enhance the performance of the GHX as compared with other nanoparticles. The maximum enhancement in the increase in outlet fluid temperature and reduction in pipe length with graphite particle‐based nanofluid are 68.3% and 63.3%, respectively, for an increase in temperature difference from 7°C to 15°C between the atmosphere and the ground. Also, with the graphite particle‐based nanofluid and the increase in pipe diameter from 20 to 50 mm, the fluid outlet temperature increases up to 11.2%, and the requirement in GHX length reduces up to 55%.