This paper deals with entropy generation of two immiscible fluids inside an inclined channel under the influence of a uniform magnetic field. The channel consists of two regions such that a viscous fluid occupies the region I and an electrically conducting fluid occupies the region II. The governing equations of momentum and energy for two regions are solved by Mathematica package BVPh 2.0 which is based on homotopy analysis method. The analytical results are validated against other numerical simulations and experimental data and excellent agreements are achieved. The entropy generation components due to heat transfer and fluid friction for two immiscible fluids are formulated and then the total entropy generation is computed. The influence of various parameters including Grashof number, Hartmann number and inclination angle on the total entropy generation and its components is examined and discussed. Results show that total entropy generation has a direct relationship with Grashof number and inclination angle, while it has a reverse relationship with Hartmann number. It can also be found that although the enlargement of Hartmann number increases the contribution of entropy generation due to Ohmic dissipation, it still reduces the total entropy generation inside the channel.