A novel technique for the preparation of water-soluble carbon nanotubes was demonstrated using a pulsed streamer discharge generated in water. The technique involved chemical reactions between radicals generated by the pulsed streamer discharge and carbon nanotubes. The pulsed streamer-treated carbon nanotubes were homogeneously dispersed and well solubilized in water for a month or longer. The mechanism of solubilization of carbon nanotubes by the pulsed streamer discharge is discussed based on FTIR spectroscopy and optical emission spectra measurements. FTIR spectroscopy revealed that -OH groups, which are known to impart a hydrophilic nature to carbon material, were introduced on the carbon nanotube surface. Optical emission spectra from the pulsed streamer plasma showed that highly oxidative O(*) and H(*) radicals were generated in water. These results suggest that the functionalization of the carbon nanotube surface by -OH group can be attributed to the O(*) and H(*) radicals. An advantage of the proposed method is that there is no need for any chemical agents or additives for solubilization. Chemical agents for solubilization are generated from the water itself by the electrochemical reactions induced by the pulsed streamer discharge.