Multiwalled-carbon nanotubes (MWCNTs) were functionalized via thermoinitiated free radical polymerization of 2-hydroxyethyl methacrylate (HEMA) using benzoyl peroxide. Tip sonication was used during the polymerization reaction to separate agglomerated nanotubes. The functionalization was confirmed by control experiments and attenuated total reflectance Fourier transform infrared spectroscopy (ATR-FTIR). Differential scanning calorimetry indicated that the addition of poly(HEMA)-MWCNTs to a two-component polyurethane coating will have little effect on the glass transition temperature of the coating. The poly-(HEMA)-functionalized MWCNTs formed large colloidal structures of highly dispersed nanotubes in both the nonsheared and sheared coatings as determined by atomic force microscopy. This study determined a quick and easy method to functionalize MWCNTs for incorporation into a two-component polyurethane coating. A simple method for producing ordered structures of the MWCNTs via shear observed. (C) 2011 Wiley Periodicals, Inc. J Appl Polym Sci 121: 964-969, 2011