Small multilayer fullerenes, also known as carbon nano-onions (CNOs; 5–6 nm in diameter, 6–8 shells), show higher reactivity than other larger carbon nanostructures. Here we report the first example of an in situ polymerization of aniline on phenyleneamine-terminated CNO surfaces. The green, protonated, conducting emeraldine polyaniline (PANI) was directly synthesized on the surface of the CNO. The functionalized and soluble CNO/PANI composites were characterized by TEM, SEM, DSC, Raman, and infrared spectroscopy. The electrochemical properties of the conducting CNO/PANI films were also investigated. In comparison with pristine CNOs, functionalized carbon nanostructures show dramatically improved solubility in protic solvents, thus enabling their easy processing for coatings, nanocomposites, and biomedical applications.