Multi-walled carbon nanotubes (MWNTs) were modified covalently with hydrophilic polyacrylic acid (PAA) oligomer. Fourier transform infrared (FTIR), thermogravimetric (TG) analysis, transmission electron microscopy (TEM) and scanning electron microscopy (SEM) were used to characterize the modified MWNTs. The solubility of the modified MWNTs in water was determined to be 55.6 mg/mL by UV/vis spectroscopy. They could be dispersed homogeneously in water-borne epoxy resin and improve the mechanical properties of the resin significantly. The reinforcing ability of the modified MWNTs should be contributed by the fine dispersion of the MWNTs in resin matrix and the robust covalent binding formed by the carbon nanotube-bound carboxylic acid and epoxy groups in the resin.