Multiwalled carbon nanotubes in the form of bucky papers were modified using Ar/O-2 plasma and thereafter melt-mixed into polycarbonate. The effect of plasma modification on the nanotubes was followed by XPS, indicating the formation of carboxylic or ester groups at the nanotube surfaces. In the melt-mixed nanocomposites, the modified nanotubes exhibited a better macrodispersion and better phase adhesion to the matrix as evidenced by morphological investigations. The electrical percolation threshold was not altered and occurred below 0.5wt.-% nanotubes. The mechanical properties were improved by having higher values of stress at yield, stress till beyond the yield point, and strain at break illustrating the effect of both better dispersion and enhanced phase adhesion.