Microcombustion is a promising method for fulfilling the energy requirements of small-scale systems currently powered by portable batteries. However, its applications rely upon mitigation of heat losses, which adversely affect flame stability and performance. Heat losses in turn depend upon wall properties, especially thermal conductivity. It is thus necessary to systematically investigate the relationship between wall thermal conductivity and microcombustor performance using the exergy analysis. In this work, entropy generation rates of different irreversible processes in an annular microcombustor were computed for stoichiometric hydrogen air mixture using CFD simulations of reactive flow for wall thermal conductivities in the range 0.1-325 W/m K. Chemical reaction, heat conduction, and mass diffusion were the dominant contributors to entropy generation, in the decreasing order. Irreversibilities due to combustion decreased as thermal conductivities increased. Diffusion contributions were most sensitive to the changes in thermal conductivity but chemical reaction and heat conduction contributions changed marginally. Results showed that walls did not contribute significantly to entropy generation, but increased wall heat losses at higher thermal conductivities adversely affected the exergetic performance of microcombustor through availability losses and by influencing the flow gradients. Based on the results of this study, wall thermal conductivity in the range 0.1-1.75 W/m K was found suitable in order to obtain uniform wall temperature profiles and high exergetic efficiencies. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.