Three-dimensional simulations are presented for incompressible laminar forced convection flow adjacent to backward-facing step in rectangular duct and the effects of step height on the flow and heat transfer characteristics are investigated. Reynolds number, duct's width, and duct's height downstream from the step are kept constant at Re = 343, W = 0.08 in, and 11 = 0.02 m, respectively. The selection of the values for these parameters is motivated by the fact that measurements are available for this geometry and they can be used to validate the flow simulation code. Uniform and constant heat flux is specified at the stopped wall downstream from the step, while other walls are treated as adiabatic. The size of the primary recirculation region and the maximum that develops in the Nusselt number distribution increase as the step height increases. The "jet-like" flow that develops near the sidewall within the separating shear layer impinges on the stepped wall causing a minimum to develop in the reattachment length and a maximum to develop in the Nusselt number near the sidewall. The maximum Nusselt number, in the spanwise distribution, develops generally in the same region where the reattachment length is minimum. The maximum in the friction coefficient distribution on the stopped wall increases with increasing step height inside the primary recirculation flow region, but that trend is reversed downstream from reattachment. The three-dimensional behavior and sidewall effects increase with increasing step height.