This paper investigates the effects of tube length and diameter on the distributions of tensile stress and interfacial shear stress of a single-walled carbon nanotube in epoxy matrix. It was shown that a smaller tube diameter has a more effective reinforcement and there exists an optimal tube length at which reinforcement is maximized. It was also found that a carbon nanotube has a greater stress transfer efficiency than a solid fibre, providing flexibility for toughness and tensile strength optimization. (C) 2004 Kluwer Academic Publishers.