In this study, carbon nanotubes (CNTs) were synthesized using ethanol diffusion flames in a stagnation-flow system composed of an upper oxidizer duct and a lower liquid pool. In the experiments, a gaseous mixture of oxygen and nitrogen flowed from the upper oxidizer duct, and then impinged onto the vertically aligned ethanol pool to generate a planar and steady diffusion flame in a deficient oxygen environment. A nascent nickel mesh was used as the catalytic metal substrate to collect deposited materials. The effect of low oxygen concentration on the formation of CNTs was explored. The oxygen concentration significantly influenced the flame environment and thus the synthesized carbon products. Lowering the oxygen concentration increased the yield, diameter, and uniformity of CNTs. The optimal operating conditions for CNT synthesis were an oxygen concentration in the range of 15%-19%, a flame temperature in the range of 460 °C-870 °C, and a sampling position of 0.5-1 mm below the upper edge of the blue flame front. It is noteworthy that the concentration gradient of C2 species and CO governed the CNT growth directly. CNTs were successfully fabricated in regions with uniform C2 species and CO distributions.