In this study, carboxylic acid functionalized carbon nanotubes (CNTs) were used to modify epoxy with intent to develop a nanocomposite matrix for hybrid multiscale composites combining benefits of nanoscale reinforcement with well-established fibrous composites. CNTs were dispersed in epoxy by using high energy sonication, followed by the fabrication of epoxy/CNTs composites. The processibility of CNTs/epoxy systems was explored with respect to their dispersion state and viscosity. The dependences of viscosity, mechanical and thermomechanical properties of nanocomposite system on CNTs content were investigated. The dispersion quality and reagglomeration behavior of CNTs in epoxy and the capillary infiltration of continuous fiber with the epoxy/CNTs dispersion were characterized using optical microscope and capillary experiment. As compared with neat epoxy sample, the CNTs nanocomposites exhibit flexural strength of 126.5 MPa for 1 wt% CNTs content and impact strength of 28.9 kJ m2 for 0.1 wt% CNTs content, respectively. A CNTs loading of 0.1 wt% significantly improved the glass transition temperatures, Tg, of the nanocomposites. Scanning electron microscopy (SEM) was used to examine the fracture surface of the failed specimens. It is demonstrated that the properties of CNTs/epoxy system are dispersion-dominated and interface sensitive. POLYM. ENG. SCI., 2013. (c) 2012 Society of Plastics Engineers