The functionalization with formaldehyde via an electrophilic substitution reaction and graft with poly (acrylic acid) (PAA) by "grafting from" technology have been carried out for multiwalled carbon nanotubes (MWNTs) and MWNTs-PAA composites have been formed. The IR and TEM results show presence of covalent band and so-called "core-shell" structures for MWNTs-PAA. The MWNTs-PAA exhibits excellent suspendability in water, which is significant to explore the potential application of carbon nanotube in biological and medical systems.