Using density functional theory, we have theoretically studied sidewall functionalization of carbon nanotubes (CNT) with a nucleophilic organic carbene, dipyridyl imidazolidene (DPI). When compared to the dissociated system, formation of the adduct from defect-free (5,5) tube and the DPI is weakly exothermic. However, introduction of (5,7,7,5) defect or nitrogen doping at the CNT stabilizes the adduct in both physical and chemical senses, suggesting a possible way to enrich the chemistry of sidewall functionalization. The work function of the adducts is found to decrease by similar to0.4 eV per DPI/80 atoms. Upon binding of the DPI, electronic structures are modified in such a way that small gaps are introduced, where the size of the gap depends upon the degree of functionalization. (C) 2004 American Institute of Physics.