This paper is focused on steady-state, laminar, two-dimensional natural convection in an annulus between two isothermal concentric square ducts. Stream function-vorticity formulation was applied and control volume integration solution technique is adopted in this study. Solutions are obtained up to Rayleigh number of 10(6). Three different dimension ratios, L*, namely 1/5, 3/10 and 3/5, are considered. The effects of dimension ratio and Rayleigh number on the flow structure and heat transfer are investigated. The results show that dimension ratio and Rayleigh number have a profound influence on the temperature and flow field. As the dimension ratio is increased (decreasing the gap between squares), a multiple cell solution is developed between the upper sides of the square ducts. The transition to the multiple cell solution depends on the Rayleigh number, Ra and dimension ratio L*. The results of heat transfer are also presented and comparisons with earlier experimental results are made. (C) 2000 Elsevier Science Ltd.