In this article, a similarity solution of the steady boundary layer flow near the stagnation-point flow on a permeable stretching sheet in a porous medium saturated with a nanofluid and in the presence of internal heat generation/absorption is theoretically studied. The governing partial differential equations with the corresponding boundary conditions are reduced to a set of ordinary differential equations with the appropriate boundary conditions via Lie-group analysis. Copper (Cu) with water as its base fluid has been considered and representative results have been obtained for the nanoparticle volume fraction parameter φ in the range 0 ≤ φ ≤ 0.2 with the Prandtl number of Pr = 6.8 for the water working fluid. Velocity and temperature profiles as well as the skin friction coefficient and the local Nusselt number are determined numerically. The influence of pertinent parameters such as nanofluid volume fraction parameter, the ratio of free stream velocity and stretching velocity parameter, the permeability parameter, suction/blowing parameter, and heat source/sink parameter on the flow and heat transfer characteristics is discussed. Comparisons with published results are also presented. It is shown that the inclusion of a nanoparticle into the base fluid of this problem is capable to change the flow pattern.