Carbon nanotubes (CNTs) were functionalized with -CF(2)SO(3)H groups and hydrated with 1-3 water molecules per sulfonic acid group to investigate proton dissociation and transport in confined, hydrophobic environments. The distance between sulfonate groups was systematically varied from 6 to 8 angstrom, and three different CNTs were used to determine the effects of nanoscale confinement. The inner walls of the CNT were either functionalized with fluorine atoms to provide a localized negative charge or left bare to provide a more delocalized charge distribution. The use of ab initio molecular dynamics permitted the study of sulfonate solvation, proton dissociation, and the formation of a hydrogen bonding network without a priori assumptions. It was shown that decreasing the distance between sulfonate groups increased proton dissociation, as well as the interactions between water molecules. As the sulfonate distance increased, connectivity among the water molecules decreased as they formed more isolated clusters around the sulfonate groups. The sulfonate distance and geometry were the most dominant factors in proton dissociation; however, the hydrophobic environment and nanoscale confinement became more important as the distance between sulfonate groups increased.