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The present study deals with the flow and heat transfer analysis of two immiscible fluids in an inclined channel embedded in a porous medium. The channel is divided in two phases such that a third grade fluid occupies the phase I and a viscous fluid occupies the phase II. Both viscous and third grade fluids are electrically conducting. A constant magnetic field is imposed perpendicular to the channel walls. The mathematical model is developed by using Darcy's and modified Darcy's laws for viscous and third grade fluids respectively. The transformed ordinary differential equations are solved numerically using a shooting method. The obtained results are presented graphically and influence of emerging parameters is discussed in detail.