The present work includes the study of boundary lubrication properties of SAE20W40 lubricating oil added with aluminum oxide nanoparticles. Pin-on-disk tribometer is employed to study the effects of nanoparticles in different sizes (40–80 nm) and concentrations (0–1% by weight) on the friction coefficient. The experimental design consists of L18 orthogonal array involving six levels for nanoparticles concentration and three levels for nanoparticles size, sliding speed, and normal load. The presence of nanoparticles has significantly improved the lubrication properties of oil. Minimum friction coefficient is recorded at 1200 rpm rotational speed and 160 N normal load for 0.8% concentration of 60 nm sized nanoparticles. Scanning electron microscopy (SEM) and electron diffraction spectrometry (XRD) are employed to understand the friction reduction mechanism.