Sheath fluid is the solution that runs in a flow cytometer. Once the sheath fluid is running at laminar flow, the cells are injected into the center of the stream, at a slightly higher pressure. The principles of hydrodynamic focusing cause the cells to align, single file in the direction of flow.
Depending on experimental needs, different formulations of sheath fluid can be used. Many labs purchase pre-mixed phosphate buffered saline from Leinco Technologies.
Some researchers use a Hepes-buffered saline. This particular useful for high-pressure cell sorting as Hepes controls pH better at high pressure than phosphate buffers do.
Finally, since the sheath and sample core stream do not mix, on analyzers, you can use water as a sheath fluid. Adding a small amount (0.1%) of 2-phenoxyethanol will help as this serves as a surfactant, helping keep the system flowing by reducing the surface tension.