An analytical study on entropy generation considering viscous dissipation effect in the circular microchannel is reported. The fluid flow is steady, laminar, hydrodynamically fully developed and thermally developing. In the first law analysis, appropriate dimensionless variables are applied to solve the energy equation in the thermal entrance region of microchannel. Subsequently the obtained temperature field is used to derive an expression for entropy generation rate. The effect of Knudsen number and Brinkman number on the entropy generation rate and Bejan number in different axial location is presented.