Carbon nanotubes (NTs) may be among the most useful engineered nanomaterials for structural applications but could be difficult to study in ecotoxicological evaluations using existing tools relative to nanomaterials with a lower aspect ratio. Whereas the hydrophobicity and van der Waals interactions of NTs may suggest aggregation and sedimentation in aquatic systems, consideration regarding how engineered surface modifications influence their environmental fate and toxicology is needed. Surface modifications (e.g., functional groups and coatings) are intended to create conditions to make NTs dispersible in aqueous suspension, as required for some applications. In the present study, column stability and settling experiments indicated that raw, multiwalled NTs (MWNTs) settled more rapidly than carbon black and activated carbon particles, suggesting sediment as the ultimate repository. The presence of functional groups, however, slowed the settling of MWNTs (increasing order of stability: hydroxyl > carboxyl > raw), especially in combination with natural organic matter (NOM). Stabilized MWNTs in high concentrations of NOM provided relevance for water transport and toxicity studies. Aqueous exposures to raw MWNTs decreased Ceriodaphnia dubia viability, but such effects were not observed during exposure to functionalized MWNTs (>80 mg/L). Sediment exposures of the amphipods Leptocheirus plumulosus and Hyalella azteca to different sizes of sediment-borne carbon particles at high concentration indicated mortality increased as particle size decreased, although raw MWNTs induced lower mortality (median lethal concentration [LC50], 50 to >264 g/kg) than carbon black (LC50, 18–40 g/kg) and activated carbon (LC50, 12–29 g/kg). Our findings stress that it may be inappropriate to classify all NTs into one category in terms of their environmental regulation.