The outer walls of double-walled carbon nanotubes (DWNTs) were selectively oxidized using a combination of oleum and nitric acid. Intercalation of oleum between bundled DWNTs enabled a homogeneous reaction by equally exposing all outer wall surfaces to the oxidants. At optimized reaction conditions, this double-wall chemistry enabled high water solubility through carboxylic acid functional groups introduced to the outer wall, while leaving the inner tube intact, as shown by Raman scattering and high resolution TEM. These outer wall selectively oxidized DWNTs retained electrical conductivity up to 65% better than thin films of similarly functionalized single-walled carbon nanotubes, which can be attributed to enhanced electrical percolation via the nonoxidized inner tubes.