Recently, nanofluids have been widely used in heat treatment industries as quench medium with better quenching performance. The thermal conductivity of nanofluids is higher compared to conventional quench medium such as polymer, water, brine, and petroleum-based oil. This characteristic can be achieved by mixing high thermal conductivity particles in nanometer scale with a fluid as base. In this research, carbon powder and distilled water were used as nanoparticles and base respectively. The carbon source used in this research was laboratory grade carbon powder, and activated carbon as a cheaper alternative source. By adjusting the percentage of dispersed carbon particles, thermal conductivity of nanofluids could be controlled as needed. To obtain nanoscale carbon particles, planetary ball mill was used to grind laboratory-grade carbon and active carbon powder to further decrease its particle size. This milling method will provide nanoparticles with lower production cost. Milling speed and duration were set at 500 rpm and 15 hours. Scanning electron microscope (SEM) and Energy Dispersive X-Ray (EDX) were carried out respectively to determine the particle size, material identification, particle morphology. The carbon nanoparticle content in nanofluids quench mediums for this research were varied at 0.1, 0.3, and 0.5 % vol. Furthermore, these mediums were used to quench AISI 1045 carbon steel samples which had been annealed at 1000°C. Hardness testing and metallography observation were then conducted to check the effect of different quench medium in steel samples. Preliminary characterizations showed that the carbon particle dimension after milling was hundreds of nanometers, or still in sub-micron range. Therefore, the milling process parameters are need to be optimized further. EDX observation in laboratory-grade carbon powder showed that the powder was pure carbon as expected for, but in activated carbon has some impurities. The nanofluid itself, however, was stable, despite the hydrophobic characteristic of carbon. The effect of different carbon percentages in nanofluid could give an illustration for optimal ratio of nanofluid to achieve the desired material properties.