Carbon nanotubes (CNTs) possess high electrical conductivity, high chemical stability, and extremely high mechanical strength and modulus. These special properties of both single-walled and multi-walled CNTs (SWNTs and MWNTs, respectively) have attracted much attention in electrochemistry. Functionalization of CNTs is one of the most active fields in carbon nanotube research, which provides an effective tool to broaden the spectrum of electrochemical application of CNTs. In this review, we summarize various approaches to functionalize CNTs for the development of novel electrochemical sensors. Particular emphasis is directed to the use of lipid-functionalized CNTs for sensors and biosensors and for the fabrication of photo switched-functional devices. The functionalization of the nanotubes generates a novel, interesting class of nanomaterials, which combines the properties of the nanotubes and the functional moiety, thus offering new opportunities in electrochemical sensors.