Carbon nanotubes (CNTs) have unique physical and chemical properties that drive their use in a variety of commercial and industrial applications. CNTs are commonly oxidized prior to their use to enhance dispersion in polar solvents by deliberately grafting oxygen-containing functional groups onto CNT surfaces. In addition, CNT surface oxides can be unintentionally formed or modified after CNTs are released into the environment through exposure to reactive oxygen species and/or ultraviolet irradiation. Consequently, it is important to understand the impact of CNT surface oxidation on the environmental fate, transport, and toxicity of CNTs. In this review, we describe the specific role of oxygen-containing functional groups on the important environmental behaviors of CNTs in aqueous media (e.g., colloidal stability, adsorption, and photochemistry) as well as their biological impact. We place special emphasis on the value of systematically varying and quantifying surface oxides as a route to identifying quantitative structure-property relationships. The role of oxygen-containing functional groups in regulating the efficacy of CNT-enabled water treatment technologies and the influence of surface oxides on other carbon-based nanomaterials are also evaluated and discussed.