<p>This study investigates the effects of velocity slip and temperature jump boundary conditions on nanofluid flow and heat transfer in hydrophobic microchannels, which are crucial for enhancing the thermal performance of miniaturized electronic and energy systems. A two-phase lattice Boltzmann method (TPLBM) is developed to simulate forced convection of Al₂O₃–water nanofluids, accurately capturing nanoparticle–fluid interactions and interfacial dynamics. The objective is to quantify the impact of slip boundary behavior on flow resistance, heat transfer, and overall thermal–hydraulic performance. Results indicate that slip velocity and temperature jump effects are strongest near the channel inlet and grow with the slip coefficient (<i>B</i>). Meanwhile, temperature jumps reduce fluid temperature and weaken nanoparticle Brownian motion, which smooth velocity and thermal oscillations downstream. As <i>B</i> increases from 0.00 to 0.10, the average friction factor (<i>f</i>_avg) decreases by approximately 40.5%, while the average Nusselt number (<i>Nu</i>_avg) follows a non-monotonic trend— reaching a minimum of 9.69 at <i>B</i> = 0.03 and recovering slightly to 9.77 at <i>B</i> = 0.10. The performance evaluation criterion (<i>PEC</i>) exceeds 1.0 for <i>B</i> ≥ 0.03, peaking at 1.14. These findings demonstrate a favorable balance between heat transfer and flow resistance under optimized slip conditions. The novelty of this work lies in the coupling of velocity slip and temperature jump boundary modeling with a two-phase LBM, offering a more accurate and predictive approach for designing nanofluids-based microchannel heat exchangers.</p>