We discovered a novel nanoparticle (NP) crude oil interaction and propose a mechanism of NP-based enhanced oil recovery. This NP crude oil interaction and its effects on oil recovery are systematically investigated by conducting microfluidic experiments in both single-pore scale and "reservoir-on-a-chip" scale. It is confirmed that hydrophilic silica NPs in an aqueous phase could lead to dramatic swelling, dewetting, and disjoining of crude oil. The swelling ratio increased with decreased aqueous phase salinity and with increased concentrations of negative charging of NPs. Natural polar components in crude oil is shown to play a very important role. From a pore-scale perspective, this oil swelling and dewetting increased the flow resistance in the swept region and redirected flooding liquid toward the unswept region. From a reservoir perspective, the mobility ratio was reduced because oil swelling and dewetting modified the relative permeabilities. This improvement in sweep efficiency resulted in approximately 11% incremental oil recovery in a completely homogeneous porous micromodel, with 2000 ppm of NPs suspended in seawater.