The invention incorporates new processes for the chemical modification of carbon nanotubes. Such processes involve the derivatization of multi- and single-wall carbon nanotubes, including small diameter (ca. 0.7 nm) single-wall carbon nanotubes, with diazonium species. The method allows the chemical attachment of a variety of organic compounds to the side and ends of carbon nanotubes. These chemically modified nanotubes have applications in polymer composite materials, molecular electronic applications, and-sensor devices. The methods of derivatization include electrochemical induced reactions, thermally induced reactions (via in-situ generation of diazonium compounds or pre-formed diazonium compounds), and photochemically induced reactions. The derivatization causes significant changes in the spectroscopic properties of the nanotubes. The estimated degree of functionality is ca. 1 out of every 20 to 30 carbons in a nanotube bearing a functionality moiety. Such electrochemical reduction processes can be adapted to apply site-selective chemical functionalization of nanotubes. Moreover, when modified with suitable chemical groups, the derivatized nanotubes are chemically compatible with a polymer matrix, allowing transfer of the properties of the nanotubes (such as, mechanical strength or electrical conductivity) to the properties of the composite material as a whole. Furthermore, when modified with suitable chemical groups, the groups can be polymerized to form a polymer that includes carbon nanotubes.