Analysis and simulation of rarefied nitrogen gas flow and heat transfer were performed with the Knusden number ranging from 0.05 to 1.0, using the direct simulation of Monte Carlo (DSMC) method. The influences of the Kn number and the aspect ratio on the gas temperature and wall heat flux in the microchannels were studied parametrically. The total and local heat fluxes of the microchannel walls varying with the channel inlet velocities were also investigated in detail. It was found that the Kn number and the aspect ratio greatly influence the heat transfer performance of microchannels, and both the channel inlet and outlet have higher heat fluxes while the heat flux in the middle part of channels is very low. It is also found that the inlet free stream flow velocity has small affect on the wall total heat flux while it changes the distribution of local heat flux.