Single-walled carbon nanotubes (SWNTs) were well-functionalized for a study of their defect-derived luminescence properties. The soluble nanotube sample was homogeneously dispersed in poly(vinyl alcohol) (PVA) films via solution-phase mixing and then wet-casting. The PVA films embedded with the functionalized SWNTs were strongly luminescent according to spectroscopic and confocal microscopic results. The luminescence from the films was highly polarized, with the observed anisotropy value approaching the limit for collinear absorption and emission dipole moments. The films were mechanically stretched to align the embedded nanotubes, and results from luminescence measurements of the stretched films suggested that the excitation was strongly in favor of the direction along the nanotube axis. Mechanistic implications of the polarization spectroscopy results for the luminescent functionalized nanotubes in the polymeric matrix with and without the mechanic alignment are discussed.