Phenoxy (poly(hydroxyether of bisphenol-A), also known as poly(bisphenol-A-co-epichlorohydrin)) was grafted onto multiwalled carbon nanotubes (MWNTs) by a reactive blending process. Reactions between terminal glycidyl groups of phenoxy and carboxylic acid groups of acidified MWNTs resulted in the grafting of phenoxy chains onto MWNTs. The mechanical properties of composites of poly(ethylene oxide) (PEO) and phenoxy-grafted MWNTs were studied. The miscibility between PEO and phenoxy enabled the good dispersion of nanotubes in the PEO matrix as evidenced by polarized optical microscopy and transmission electron microscopy. The spherulite size of PEO progressively decreased with increasing amount of phenoxy-grafted MWNTs added. At an optimal MWNT content of 1.5 wt%, the addition of phenoxy- grafted MWNTs led to increases of storage modulus, Young's modulus, yield stress, tensile strength, ultimate strain, and toughness of PEO by 113, 228, 166, 442, 1240, and 4080%, respectively. Such simultaneous increases in stiffness, strength, ductility and toughness of a polymer by an additive are rather uncommon.