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Partial filling of porous medium insert in a channel alleviates the tremendous pressure drop associated with a porous medium saturated channel, and enhances heat transfer at an optimum fraction of porous medium filling. This study pioneered an investigation into the viscous dissipative forced convective heat transfer in a parallel-plate channel, partially occupied with a porous medium at the core, under local thermal non-equilibrium condition. Solving the thermal energy equation along the Darcy–Brinkman equation, new exact temperature fields and Nusselt number are presented under symmetrical isoflux thermal boundary condition. Noteworthy is the heat flux bifurcation at the interface between the clear fluid and porous medium driven by viscous dissipation, in cases where the combined hydrodynamic resistance to fluid flow and thermal resistance to fluid conduction is considerable in low Darcy number porous medium insert. However, viscous dissipation does not affect the qualitative variation of the Nusselt number with the fraction of porous medium filling. By using Al2O3-Water nanofluid as the working fluid in a uniformly heated microchannel, partially filled with an optimum volume fraction of porous medium, the heat transfer coefficient improves as compared to utilizing water. The accompanied viscous dissipation however has a more adverse impact on the heat transfer coefficient of nanofluids with an increasing Reynolds number.