Analytic solutions for the gas and liquid velocity and temperature distribution are determined for steady state one-dimensional microchannel cylindrical Couette flow between a shaft and a concentric cylinder. The solution is based on the continuum model and takes into consideration the velocity slip and temperature jump in the gaseous phase defined by the Knudsen number range of 0.001 < Kn < 0.1. The two fluids are assumed immiscible. The gas layer is adjacent to the shaft which rotates with angular velocity ω_s and is thermally insulated. The outer cylinder rotates with angular velocity ω_o and is maintained at uniform temperature. The governing parameters are identified and the effects of the Knudsen number and accommodation coefficients on the velocity and temperature profiles, reduction in the overall temperature rise due to the gas layer, the Nusselt number and shear reduction are examined. It was found that the required torque to rotate the liquid in the annular space is significantly reduced by introducing a thin gas layer adjacent to the shaft. Also, reduction in shaft temperature is enhanced through a combination of high energy accommodation coefficient and low momentum accommodation coefficients. Results also indicate that the gas layer becomes more effective in reducing the shaft temperature when the housing angular velocity is much larger than the shaft angular velocity.